Steven Frank from Panic has outlined several important differences between the way that Address Book (on Snow Leopard) and Google Contacts manage data. This is on his personal website. He's quick to point out that it is not meant to be a comprehensive list, but it reflects several things that I also noticed.
A few months ago, I had the notion to replace my MobileMe subscription with syncing to Google services, using BusyCal (whose icon is shown here) for calendars and either BusySync or Address Book's own built-in support for syncing contacts to Google. The experiment was short-lived.
I'm not saying that it isn't possible to do, but there are some limitations and incompatibilities. As one example, when you create an event on the iPhone calendar, you can create two alarms. I use this all of the time. The first alarm is a "Hey, don't forget this is coming up" reminder, and the second alarm tells me "Hey! You need to deal with this now." When syncing to a Google Calendar, you can only create one alarm. Is that a major difference? No, but it's not insignificant.