Will there be any devices?
I can't see Android doing well unless and until the big three get seriously involved. Nokia and Sony Ericcson are out and Motorola haven't exactly signed up to put Android on the next RAZR.
For this to get momentum, there need to be a range of *consumer* devices in the market, as opposed to niche geek products weighting in at 200g plus.
There also needs to be infrastructural support, which doesn't seem to be being addressed. Google don't seem to be engaging with the telcos to get data plans that will make this work, or offering an easy to use way of delivering trusted apps to the device.
Google's model in Gmail and Maps has been to "buy the business" by taking a bigger hit on delivery costs that any competitor is prepared to. If they want to do this in mobiles they will need to be subsidising the handsets, subsidising the bandwidth and generally hauling Android over the mountains between it and significant market share.
Until then, I'd say that any business model for an Android app would involve winning the $275k and going off to do something else.