I used my annual upgrade to get the Ally early last month. Loved it at first, but after about two weeks I slowly grew to hate it. The touchscreen became more and more unresponsive, the device would freeze/reboot at the most inopportune times, and, strangest of all, it wouldn't stay off after I turned it off and plugged the charger in! (Yes, it would turn back on automatically upon the charger being plugged into the wall. Thought mine was just possessed at first, but in speaking to a very friendly Verizon customer service rep it was confirmed that this is a universal issue with the Ally.)
So late last month, I used my one exchange in the first 30-days to trade up to the Droid Incredible. Have had it for a week now and absolutely LOVE it. All the problems I had with my Ally? Nonexistent here. And that, if you ask me, was well worth the amount I had to pay to get it. (Which will only be about $150 after I get my $100 rebate card and the $50 I paid for the Ally I returned gets credited back to my account.) I was skiddish at first about not having a physical QWERTY keyboard because I text/browse a lot and they certainly help (and also because I had a TERRIBLE experience with an all-touch phone I had as an AT&T customer, the LG Vu), but I adapted to the all-touch interface quicker than I thought I would. The predictive text/spelling correction feature on the Incredible is great and has helped me a lot. So far, the device is living up to its name.
I thought about getting a Blackberry Bold or Palm Pre Plus, but having heard so many great things about the Android platform I decided to take a chance. Very glad I did. 
As far as the Ally goes, I'm probably biased due to my bad experience, but I wouldn't recommend it to anyone. But perhaps you will have better luck than I did in the event you do choose it. Hope you enjoy whatever you decide on!
LG has pushed two updates for the Ally since initial release. Both are updates to 2.1. The latest was pushed around Thanksgiving 2010. Each has made our Ally more stable, but there are several issues with which we continue to wrestle:
IMAP Email: if you do email on the phone from an IMAP server (not POP3) deleting messages on the phone does not delete them from the server. You receive the same message over and over. Ultimately, we solved this problem by using K9 Mail instead of the standard email app.
Bluetooth: This device does not play nicely in the sandbox with the Bluetooth in my wife's car (Pioneer 900BT navigation system). Her old LG Env2 was absolutely first rate in interoperating with the Pioneer. I understand Bluetooth issues are known to be related to Android 2.1.
Data usage: boy does this hog the unlimited data plan. Compared with my Droid X, connected to both IMAP and Exchange, the Ally does twice the data traffic. Still haven't nailed this one down.
Would I recommend it? Probably not. My wife absolutely loves her Ally but I am really getting the impression the Ally will be an orphaned phone with limited support from VZ and LG within 6 months. The forever-delayed 2.2 update plus the fact VZ is giving them away free doesn't bode well for the phone maintaining a strong position in their portfolio long term.
Opinion, of course. YMMV.
