Allowing a universal , open source, open development model on the cell phone industry will FINALLY allow mobile applications and location-based services to take off. when hundreds of millions of cell phones will be able to take advantage of the same software, it will really be an incredible market of software and service innovation.
I think this comment by winterspan is pertinent. The real advantage of this system is that it is a functional operating system, Linux, that will be used by all the parties listed, and there are a lot of big players here, and a single flavor of Linux at that. Currently no operating system is used by a large enough group to standardize either the user interface or 3rd party applications. Go look at Roughlydrafted for excellent summaries on the various cell phone operating systems.
Symbian may be the most robust of the operating systems that is widely available, but in fact there are several incompatible versions, so that programs that run on one version can't run on the others. This limits its usefulness. I understand also that it is an aging system, not really up to the requirements of modern internet and multitasking use.
Mobile Windows or whatever it's called these days is still a minor player. The operating system does not seem to me to be robust, with frequent crashing, and the UI is really inferior. Look at the difference between the Treo with mobile windows and the Treo with Garnet/Palm. the windows version requires a lower resolution screen, requires many more taps or choices to accomplish the same action, etc. And it has sold only a few million sets, not really that much more than Apple has in only a few months.
Palm operating system as described by many here is an ancient system, it works pretty well, although it crashes on me at least once a week. Many 3rd party programs. but can't do multitasking. Palm realizes this and supposedly is working on its own version of Linux, but when push comes to shove, has anybody seen it?
Linux is the other very common phone operating system, but mainly on cheap phones in asia, and again, like Symbian, exists in multiple incompatible versions so that programs that run on one can't run on the others.
So a single version of Linux, with single set of SDK, means it will be really useful both for developers and for users. Everyone is focusing on the ability to mod this system, but I think it is the stability of Linux and the reliably common (hopefully) user interface that will be the real selling points. I can't hand my Treo to my wife to make a phone call, that is how confusing the interface is. I can't pick up her Blackberry to answer it if she's out of the room because I can't figure out which button to push. A consistent user interface, even if a little confusing, would mean lots of people would be used to it, so could pick up any of the phones with Android and use it fairly easily.
Of course, Apple insists on being the jewel in the crown of usability (or is it, usability is the jewel in the crown of Apple), so that almost anyone intuitively understands how to use it. But at least a common user interface in Android would be better than nothing.