Since Ive been using an android phone ( Galaxy 3, S2 , Htc OneX) and have an Ipod Touch 4 for 2 years now, maybe I can help you out on this matter.
Ipod touch and Iphone 4 have virtually the same hardware (except camera), so basically it has same performance as iphone 4.
Gaming- IOS hands Down. If you dont need a big screen and want latest games with almost no lag and better response, ios > android. Games which used to lag on s2 (a lil) run smooth on ipod touch (due to better IOS development), Plus you can get ahem ahem games more quickly, n just need a single .ipa file, unlike many android games which need data files. IOS wins this.
Music- S2 and Ipod touch have the same music quality, but I liked Ios music player better (personal preference). But putting songs in android are much easier than ios where itunes theory sucks to the core in terms of portability. So its a tie.
Web Browsing- Safari is much better and fluid compared to android's browser, though chrome,opera etc have similar performance,a Tie here too.
Ebooks- Dont use these much but IMO Its a preference of Screen Size vs Quality. Iphone will have sharper text while android phones may have bigger screen.
OVERALL my suggestion will be, If you havent explored IOS yet, Go for Iphone 4, I bought one for my bro last week for 24800 (8gb with bill), Yes, 8gb can be less if you are a hardcore gamer (fifa 13, nfs etc) otherwise for a casual user it is enough.
Ill be buying a note 2 soon, so you cant say I am an apple fan boy, but it surely has some class about it.
You wont go wrong either way, Iphone 4 and a 25k Android, both will be a good buy
Good Luck!