RE: only if
Sure on a PayG plan it's "only" £100 extra, but buying a smartphone without a contract is pretty rare these days, especially with the target audience of these devices. So how do the actual contracts compare? Orange offer a HTC Desire for free at £30 a month on the same plan as the £35 a month iPhone 4. So that's £119 extra up front when purchased, then £120 over the 24 month period, valuing the Apple "cool tax" on this product at £239.
Alternatively I phoned up orange when purchasing my HTC Desire, and was offered a discounted rate of £25 a month by the service rep when I pushed them a little. I've just phoned posing as a purchaser of the iPhone, and attempted a similar ploy, but the service rep said they aren't authorised to offer any discounts on the iPhone 4.
This puts the total iPhone markup for the intelligent buyer at £359 (for the 24 month contract), or £138 per mm thinner.
The term "better" in reference to the screen is arguable here, given the different technologies employed. I find my AMOLED display fantastic and very easy on the eyes (as it has no backlight). The contrast ratio on the iPhone 4 is frankly pathetic, and given it's usage of LCD technology, the blacks cannot compare to AMOLED. I haven't seen Super AMOLED, but from what I've read, it's set to dispel any notions that Apple has the best display tech.