Android is a Linux-based mobile phone operating system developed by Google. Android is unique because Google is actively developing the platform but giving it away for free to hardware manufacturers and phone carriers who want to use Android on their devices.
Beyond the Phone:
A modified version of Android is used in the Google TV, the Barnes & Noble Nook eReader, the Samsung Galaxy Tab, and countless other devices. Parrot makes both a digital photo frame and a car stereo system powered by modified versions of Android.
Open Handset Alliance:
Google formed a group of hardware, software, and telecommunication companies called the Open Handset Alliance with the goal of contributing to Android development. Most members also have the goal of making money from Android, either by selling phones, phone service, or mobile applications.
Android Market:
Anyone can download the SDK (software development kit) and write applications for Android phones. Google doesn't screen developers or applications.
These apps can be downloaded from the Android Market. If the app costs money, you pay for it using Google Checkout. T-Mobile also has an agreement to allow their phone customers to purchase some apps and have the fee added to their monthly phone bill.
Some devices do not include support for the Android Market and may use an alternative market.
Service Providers:
The iPhone has been very popular for AT&T, but unless you void your warranty to unlock it, you can only use an iPhone with AT&T. Android is an open platform, so many carriers can potentially offer Android-powered phones. That doesn't mean individual carriers won't lock the specific phone they sell you to their service, but every major carrier in the US offers an Android phone. Android is currently the fastest growing phone platform in the world.
Data Plan:
To use Android on a phone, you need a data plan on top of your voice plan. You can't even activate an Android phone without a data plan enabled. Some networks in the US offered tiered data service, and some offer unlimited plans.
Google Services:
Because Google developed Android, it comes with a lot of Google services installed right out of the box. Gmail, Google Calendar, Google Maps, and Google Web search are all pre-installed, and Google is also the default Web page for the Web browser. However, because Android can be modified, carriers can choose to change this. Verizon Wireless, for instance, has modified some Android phones to use Bing as the default search engine.