Why the Nexus S matters

Nexus S from Google

The hardware has only minor upgrades from phones released six months ago. The key is the untouched software.
There are two major hardware advancements in the new Samsung Nexus S Google Phone.  One is the Near Field Communication chip inside which at the moment allows you to scan tags that are around town to get more information about the venue.  My local UPS store has one and I scanned it the tag there.  I was told the same information that I would have got had I used GPS and picked out my location from Maps.
NFC will be a big deal when people can use phones as credit cards and EZ Passes.  At the moment it, it is nearly useless except as a neat trick.
Speaking of neat, the other improvement to the Nexus S over Galaxy S phones is the slightly curved glass front panel, called the 'Contour Display'.  It feels a bit better when making calls and it is quite nice to show off (and might prevent breakage from some falls) but overall, it doesn't affect much.  But really, these two things aren't why you would purchase a Nexus S.
So why not just get a very similar T-Mobile Vibrant that was released this summer?
The Nexus S is about defining the pure Google experience and keeping the carriers and manufacturers honest...
Let's face it.  The carriers have messed up Android pretty bad.  Even some of the handset manufacturers have taken their toll on the Android experience.  Every overlay, be it TouchWiz from Samsung, Blur from Motorola, Sense from HTC or anything that LG, Sony or Dell do with their devices usually takes away more than it adds.  There are some helpful additions --  Samsung's TouchWiz adds a nice button array to the notification drawer, Sense adds helpful camera utilities, Motorola's (MOT) Blur is just downright awful -- but overall they distract from the experience and getting things done.
If you don't believe that the manufacturers are messing up their own devices, take a look at the flagship products across all the manufacturers.  The flagship Motorola phones are the Droids which have relatively little Blur on them.  The best HTC phones: the Nexus One, Droid Incredible, HTC EVO and T-Mobile G2 are all relatively light on Sense or don't have it at all.  And, like I said earlier, the new Nexus S is king of the Samsung phones mostly because it is stock Android.

look away! Verizon's Fascinate with Bing

If the manufacturers are complicit in diluting the Android experience, the carriers are the executioners.  All four major US carriers try to supplant Google's own services with their own inferior pay services, especially in mapping.  T-Mobile's MyTouch 4G removes Google's Voice Actions search button and replaces it with their own "answer" button that uses a different, inferior technology.  Sprint (S) puts a overlay system on their some of their phones that slows down the OS considerably.  Verizon (VZ) is by far the worst by removing Google's search functionality on some of their phones and replacing it with Microsoft's (MSFT) Bing.  AT&T (T) removes the ability to sideload apps and slaps a bunch of useless Yahoo (YHOO) stuff on there and has yet to update one phone to Android 2.2.
Why invest in overlays and bad software if it only serves to devalue the hardware? For the same reason that PCs are loaded up with trialware and manufacturer specific apps - they make money on the side...but at a usability cost to consumers.
What's amazing is that all of this work that they do to add software to Android only serves to decrease the value of the phone.  Across the board, the most expensive Android phones on every carrier are the ones with pure Android or as close to pure Android as possible.  (AT&T doesn't have an untouched device but their two best Android phones, the Aria and Captivate, are relatively low on overlay).
All of the overlays and carrier add-ons also serve to slow down updates to the Android OS.  This is important because important features like Voice Actions, Gmail updates and speed and reliability enhancements are only available on newer versions of Android.  If you have a Nexus, those updates are coming as soon as possible.  If you have a Android 1.6 device on AT&T, you are out of luck.
Dell (DELL) and Sony devices on AT&T are shockingly just leaving last year's Android 1.6 OS (The original Droid released in October 2009 had Android 2.1).  Motorola's non-Droids are still stuck at 2.1 while it tries to slop Blur onto the newer Android 2.2 Froyo.  And even though Samsung has updated its Galaxy S line to Froyo and now Gingerbread, all four US carriers still haven't gotten around to updating (Sprint's Epic 4G update is available for manual install).
That is where the Nexus line comes in.  No trialware, bloatware or crapware on board to dilute the experience.  No messy overlays to slow down OS updates or confuse users.  Just pure Android.  As a bonus, users of the Nexus S get a shiny new Gingerbread update with some great new features, most notably keyboard improvements that put it on par with the iOS keyboard. Other OS improvements will make gaming and other graphics better and important NFC usage possible.
So is the Nexus S, the best Android device you can buy right now?  Yes.  But its hardware is not new or notable.  Its superiority lies in what isn't on it.  That should serve to shame the carriers and manufacturers who continue to mess with a good thing.