I hate iTunes with a similar passion, having had it totally mess up my library the same as you. However, I do have an iPhone, which I love and wouldn't trade for an Android for anything (the apps just are NOT the same). I use iTunes (on my netbook only) to sync and backup my phone, but I don't use it for music at all. In fact, I don't even have any music in it... I figured if it didn't have music, it couldn't hoark my library, right? But I will confess that I also don't have music on my phone. With MM on both desktop and netbook, I actually haven't felt the need for music on my phone, too. But there is a MM plugin for iTunes that looks very interesting, if you do want music on the phone AND want to have the latest iOS version.
I would say go with the iPhone and just limit your iTunes exposure to the minimum. It's worth it.