Anyone know why Android phones seem to be lacking in image/video quality?

Anyone have an idea -- Is it a software or hardware issue? Part of me thinks it's definitely software related -- especially in comparison tests going up against the iPhone like this and like this... . Apple definitely has software that boosts contrast and color automatically without post-processing to be more vibrant than real life.

I've been generally happy with the Nexus One (especially when it beat out the Incredible in a comparison test) but it seems a handful of the latest Android phones seem to be packing lots of 8 megapixel sensors but the quality seems lacking.

I've seen the Nexus 720p hack, but haven't upgraded to it myself because the quality of most videos I've seen hasn't been very impressive. It may have 720 pixels, but that doesn't mean the colors are vibrant, exposure is accurate and/or the image is crisp. I'm not sure if the developers who do these kind of hacks can build in Apple-like tweaks that get more vibrant and sharp images or if that's a hardware thing.

I've done the Desire upgrade and while I like the extra control/features, I think on auto, the images aren't as nice as the stock Nexus camera. (I have no concrete evidence here, just images seemed to come out better when I was running stock, compared to this.) Anyone else notice this? Or have any insight about the hardware vs software issue on image/video quality?