The screens not as good as the Galaxy S, nor is the hardware but it has a slightly larger screen and is a lot more intuitive to use in the menus etc. It also has been confirmed to be getting android 2.3 around June so an impending update is coming in a few months.
Faster than the Desire HD and has a much better quality screen, but it lacks the quality feel of the HD and has a slightly inferior user interface. Spec wise its one of the best around at the min but user interface and quality of feel wise it has a bit to go.
I do not see why this is winning, it packs an old style CPU which whilst it clocks faster than the Desire Z it actually runs slightly slower. The Milestone also has an SGX530 GFX card, which is a very old standard of card now that is starting to show its age, especially with the new devices coming shortly. The User Interface is horrid, I kid you not, motoBLUR is possibly the worst UI to be put on an android phone, slow laggy and generally it doesnt run as well as samsungs touchwiz or HTCs SenseUI. To be honest I dont see why this is in the running.
Right, poor specs? Ill stress what I said above. The Desire Z is a newer gen CPU than the milestone, so whilst having a slower clock speed its actually a bit quicker and has a much much better GFX card for gaming. It has the same UI as the Desire HD which is nice and simple to use and is probably the best looking UI to be found on a stock android handset. It also is confirmed to be getting Android 2.3 around June.
To be fair if you want a qwerty keyboard then the Desire Z is your choice, infact its pretty much your only logical choice to buy right now. If you dont want a keyboard then theres a world of highly specced phones out there, with the Desire HD and Galaxy S possibly being 2 of the more respected handsets alongside the Nexus S and original Desire (old handset but some awesome deals avaialable on contract).
Hope ive been of some use