I'm not sure if its particularly confusing to go from home screen to app screen - its exactly the same situation for desktop users and there's no problem there AFAIK.
The system settings are built using PreferenceScreen which is commonly used in apps so that's all standard. Even the home screen can show multiple widgets each of which can use standard UI elements, so if anything I think there is a lot of commonality between home screen and apps.
However, I must admit, I've only used an iPhone briefly once so I cannot really compare them. People who are already into the iPhone and then try Android, say they prefer iPhone. People who are already into Android and then try iPhone, say they prefer Android. I guess its a bit like having a kid!
Crossing over from one to the other, its very easy to say "oh, it doesn't do this and that therefore..." without truly exploring the possibilities.
It would be interesting to hear what multi-platform developers like TuneWiki have to say about the pros and cons of Android vs iPhone development are. People who have invested considerable time in both platforms would do a better comparison than people like us who take a look at the other platform and sneer
I don't understand that issue with chinese fonts. They are AWESOME on my HTC Hero (maybe because the manufacturer is taiwanese?). By far the best chinese fonts I've ever used. But I'm not an expert. Would be interested to see some screen shots of the Droid's fonts. Either way, again, I suspect this is not a problem with Android, more with specific devices which are still maturing.
BTW, AFAIK, at least (maybe others too) the HTC devices sold in asia come with built in chinese handwriting recognition IME. So can be used in any app. Maybe this is obvious. Just thought I'd mention it to be sure
