Among Android handsets with keyboards, the Droid is the indisputable king. The LG Ally, also on Verizon, doesn't change this, but it does make buying a Droid tougher to stomach.
The LG Ally is an odd handset, spec'd through the roof in some respects—its 800x480 screen and top-notch keyboard, along with Android 2.1—while painfully lacking in others—its pokey 600MHz processor and blotchy 3.2 megapixel camera, in particular.
In some ways it's obviously better than the Droid. In more ways, though, it can't compete.