I realize, but I also don't accept that open source is automatically more secure than proprietary code. This threadlet got started when someone suggested that the Android OS was going to be good because it's "open." My question is "why?" I don't think I've seen an answer but I believe the question has been beaten to death anyway.
Well, I think it has already been answered, but i'll summarize. There are essentially three perspectives here; a manufacturer, a developer, and a consumer perspective.
For the manufaturer, Android is first of all a benefit because the are allowed to use it (for free). They don't have to reinvent the wheel by implementing the network stack themselves etc. A lot of companies use a Linux kernel in their embedded systems for precisely that reason. Even Apple used large amounts of code from BSD when they created OS X. In addition, if Android is widely adopted, companies have the option of cooperating on software that are not cost effective for them to develop themselves. The companies will compete on hardware, as they always have, and on whatever proprietary changes to the OS they choose to make.
For the deveploper, this means that an application probably will be easier to port from one company's phone to another. This means that developing apps to the phone will become more economically attractive than it would be to make an app for a specific phone. Also, developers are free to discuss issues with each other and have the option of drilling down into the OS (and supply patches to Google) when they experience unexpected behaviour. In addition, developers of third-party apps will be able to write in new functionality and get it adopted into the main OS. This will hopefully, in time, lead to a more stable and feature-rich OS base.
For the consumer, this will hopefully lead to a better, less bugridden experience. The consumer will have a wider choice of hardware and apps and will be locked in to a lesser degree when contemplating a switch to another phone.
Of course, these benefits rely on wide adoption and aren't available just because the OS is open. Rather, the openness of the OS facilitates this. This isn't a new concept. It has been proven to work, not only when it comes to embedded systems and OS in general, but also in programming environments such as java (the most widely used programming language today). When a java developer makes an application today, chances are that he will be using several open source components in his final product.