I also had to make this choice, and hardware wise they aren't similar. The SGS is superior in the hardware department. The Iphone screen has a better resolution, but it is just amoled and not super amoled. I think the Iphone's battery is actually better than the SGS's. The question you have to ask yourself is are you going to conform to the iPhone way or do you want more freedom.
if you look at the gsmarena comparison you will see the SGS beats the iPhone in almost all the departments except application base and design(built quality). Another negative about the iPhone (and one of the big ones that made me choose the SGS) is that in South Africa you won't be able to make or receive video calls, because we don't have the networks that they restrict you on.
And the iPhone doesnt have support for java (another big one).
I have only played with the iPhone, but it is a really nice device, if you can live without video calling and like the way iOS works then by all means do it. Another thing I have to mention, I was really dissappointed with the phone when I got it, but when I got froyo all my irritations just went away. But coming from a blackberry I think most of my irritations was that I couldn't download and browse as much as i wanted to now. But I have set up a wireless access point at home so everything looks good now.