AMOLED screens provide deeper blacks and fuller colors than any traditional LCD display can possibly provide. That said, AMOLED is still a very new technology. There are kinks, as the Nexus One's many screen issues can attest to. Now it appears that another HTC-built phone, the Legend, is unable to render grayscale. (SlashGear)
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The Legend's AMOLED display was shown side-by-side with an iPod touch and HTC Hero, attempting to render grayscale colors. Instead of shades of white, gray and black, it rendered greens, pink, and brown. Is the exchange of color-accuracy for deeper, more satisfying color worthwhile? That's a choice that will vary from customer to customer.