The biggest news for me at the IO conference (watch videos) is the announcement of their partnering with Arduino open source developer kit and microprocessor boards.

Also their Android@Home wireless lighting and audio for home use.

Android Developer Kits

Cloud Robotics

ONE THING REALLY ANNOYS ME HOWEVER IN THE KEYNOTE.. THE PRESENTER CALLING IT AN "ANDROID ECOSYSTEM".... !  Ecosystems are living ecological systems. I really can't abide it when corporations steal language to brainwash people's attitudes in order to enhance brand loyalty (to increase profits). Android is not and never will be an ECOSYSTEM!  It dilutes the real meaning of an ecosystem.