The iPhone is a good experience for the lay person, no doubt. iPad probably too, aside from the little technical foibles that are cropping up already, and probably just indicative of a 1st gen device. That being said, I have 2 friends who recently bought iPhones and are having terrible troubles with AT&T's network and/or iPhone's 3G/call reception (note: both these people had AT&T before, with different phones, and had less/no problems).
As for Android vs. iPhone, there are a couple things here. First, your sister probably bought an iPhone because Apple's marketing appealed to her. Android itself doesn't have any unified marketing, but the most marketed Android phone to date, particularly on its "Androidness", was the Verizon Droid, and the marketing spin there is pretty aggressive, techno-centric, and decidedly not oriented toward the lay person, or women, or anyone who isn't a "bare knuckled bucket of does". So Apple's marketing is definitely successful, but also oriented in a direction that a major competitor hasn't really exploited yet.
Second, Android as a platform is less unified than iPhone, plain and simple. This is one of the potential downsides of Android for the average user. For the tech geek it's a boon because it means you have options, and lots of 'em. But the average person just wants simple. To is iPhone is "lock-in", to them it's "simplicity", which is great.
What I want to point out though is that I think the advantages of iPhone as a platform and as a device could largely or even entirely be achieved *without* Apple being total a-holes (see latest developer clauses and consider the implications for devs trying to make a living). I'm a bit disappointed in how Android is panning out now as far as there being far too many devices already (unnecessarily), each with small variations that make them subtly different and potentially incompatible with each other. But it's early days yet, and I have hopes that the platform will solidify and unify a bit more, maintaining the open nature and ability for customization, without betraying the fundamentally shared platform benefits and the possibility for a shared ecosystem that it can bring. The last thing I want to see is phone makers not upgrading Android OS because they haven't had time to update their custom UIs...
In the end though, Android may not be there to serve the same needs iPhone is. Hopefully they'll figure out a way to balance these issues better than Apple has, but I fear they're erring on the opposite side of some of them by being too flexible and "open". There needs to be a bit more platform standards enforcement on Google's part IMO.