The SDK included an Android emulator. Here are some screenshots from the software gPhone.
•There's a browser (no flash, but still better than the shipping Windows Mobile browser), address book, maps.
•Missing are YouTube, Gmail and Calendar apps.
•There are demos for OpenGL/3D, autocomplete, scroll bars, alarms, and pop-up notices with images.
•You know you can download and run this yourself, right now, for free. Right? Go!
•There's also a coverflow and grid type view for photos.
Open Source is definitely awesome, but its potential for "beating the iPhone" is limited. If there's one place Apple humiliates everyone else, it's their ability to make something universally usable. Personally, I love all that the Android's openness has to offer. Open is great, offering infinite freedom for niche folks like you and I, but that doesn't translate to something that's going to make it in the mainstream market.
For example, desktop environments on Linux are completely open, and have made heretofore-unimaginable strides in terms of presentation and usability. Still, nobody can point one DE that holds up against the solidity of Mac OS X.
It gets even worse when you drill down to the individual application level, where several heuristically-different UI frameworks and the personal tastes of countless developers come together to create a complete lack of unity and cohesiveness. The likelihood of two popular Linux GUI applications behaving similarly (let alone communicating with each other) is very small. I'm assuming that the Android platform will officially recommend and include only one UI framework, which will help a lot, but you've still got the infinitely diverse preferences of the developers (most of whom have no usability training) to deal with.
Once the iPhone Cocoa SDK ships, the open-source nature of Android is going to become a much less interesting benefit of the platform. Right now, I have no official way to make a desktop-quality application for the iPhone. That will no longer be true in February. Once I can make apps for iPhone (and port my existing Desktop apps to it) with Objective-C and Cocoa, the fact that the frameworks and core services are closed will matter very little to the vast majority of developers.
It will matter even less to the end users, who are only concerned that they are provided with a polished, unified, intuitive experience; one such as that promised for so long by the open-source community, and that which has been delivered - time and time again - by Apple.