What do you want the phone to do? What are your priorities? I've owned both, so I hope this is useful...
Both have the same storage... both have WiFi.... neither size presents a problem as the iPhone has a bigger footprint and is heavier, but the N95 8GB is thicker... the sound quality of both are on-par... those are the main things they have in common.
N95 8GB... The connectivity options of this are far, far superior to the iPhone. HSDPA makes web browsing very fast and it can be used as a modem for a laptop and if you're not in a HSDPA area, you still have 3G to fall back on. The web browser is as good as you'll find on any phone away from the iPhone. Bluetooth can be used for everything, including stereo audio, synchronising and data transfer. The screen is very good. Keypad is excellent which makes texting a breeze. Additional software is readily available and very well established. Battery life is just as good as the iPhone, if not a touch better (I'm getting 2-3 days out of the iPhone and got an easy 3 days out of the N95 8GB). The camera is very, very good and video recording quality is acceptable too.
iPhone... Terrible connectivity. Bluetooth cannot be used for anything more than handsfree kits, maximum data speed is via EDGE so browsing on the move is slow and much slower than the N95 8GB. WiFi shows the potential of the excellent Safari browser, which is superior to the browser on the N95 8GB by far. On-screen keypad takes some getting used to, but the auto-correcting dictionary makes life easier, if not as good as a physical keypad. Battery life is acceptable (see above comments). Sound quality is good, but bear in mind you'll need to buy an additional headphone adaptor if you want to use your own headphones (costs less than £10 though). The camera is poor, very poor. Almost acceptable if you only ever want to look at it on the screen itself, but otherwise poor. No video recording either. Also no MMS messaging, although I'm sure that will come in the future. The screen is awesome and combined with the user interface, it really brings this phone to life. It's the UI and the user experience you're buying into here. It is not the most technically advanced phone, period. But the UI, the way it works, the screen, the way you move around menus and move screen contents around is so far ahead of anything else it makes it a joy to use.
My advice.. think carefully about what you want your phone to do. If good connectivity, Bluetooth, fast browsing, a good camera etc etc are things you rely on or use a lot, you may struggle to get on with the iPhone.
If, however, you can live without the most advanced features, then the iPhone is so much more enjoyable to use and live with than anything else, you'll not regret buying one