I see most of the comments are about aesthetics, I must say I for one am happy that they didn't try to make a fashion accessory and probably worked on creating a useful phone.
I don't need a cool hip phone, I need one that works really well and does everything I need, hopeful this is what google has done.
(It looks rather sleek to me as well but to each their own)
I want phones that lots of people use so that they become appealing alternative development platforms to the iPhone. So, I DO want my phone to be a fashion accessory, so that some of the 17 million iPhone users will switch.
This is the beautiful Android phone that's going to kill the iPhone? Believe me, I want that phone to exist but I'm afraid this isn't going to be the one.
Google's achilles heal is in the nexus (heh) between user interfaces and aesthetics. For a company that powerful to have such a large and reparable weakness indicates that it may be a culture problem, or a "from the top" problem.
Either way, it's likely to continue to be a problem, and a device like a modern mobile phone-PDA can't have that kind of problem.
I sincerely doubt this is going to impact iPhone sales.
It's close though. Make the body out of metal and have a few more colors as options; that gold just do it for me. Drop the "trackball" at the bottom and make it a little bit shorter and you'd be there... HTC Legend, save for the chin, got even closer aesthetically (http://www.engadget.com/2009/12/13/htc-legend-still-looking-...)
I don't need a cool hip phone, I need one that works really well and does everything I need, hopeful this is what google has done.
(It looks rather sleek to me as well but to each their own)