The Magic uses a Qualcomm MSM 7200A 528 MHz processor, witch can handle OpenGL ES 1.1 pretty well. It's the same processor as in T-Mobile G1, HTC Hero, Samsung Galaxy. The iPhone and iPhone 3G have an ARM 11 412 MHz and a PowerVR MBX-Lite graphics. The graphic power of G1/Magic/Hero is very similar with the graphic power of iPhone/iPhone 3G, although on the iPhone the games run a little smoother because they are not programmed in Java.
The iPhone 3GS on the other hand has a new processor ARM Cortex A8 600 MHz, coupled with a new graphic chip PowerVR SGX. The new graphic chip supports OpenGL ES 2.0 and that is a big difference because it brings shader support, something similar with console/PC game quality graphics.
So for now the iPhone 3GS is the most powerful gaming phone. The Android platform right now does not have a phone with OpenGL ES 2.0, but it will arrive for sure in the near future.