Google has launched the Android Developer Challenge with a total of $10million of prize money for the best projects. We are collecting ideas for possible projects. When you start an Android project, consider using db4o for persistence. Advantages over the built-in persistence mechanism are illustrated by the Password Manager demo app.
The first released Android user interface controls are nice, but they are not as nice as the iPhone. Sometimes it only takes a couple of pixels in the right place to make a big difference. Write your own set of visual controls and widgets!
The iPhone came out with new cool user interface gestures that involve touching multiple points on the touchscreen at the same time. For some inspiration see the use on a huge touchscreen. How about creating a gesture library for Android?
You run across old friends every day, but you usually miss them by half a mile or by a couple of minutes. Wouldn't it be nice if you would notice and could go for a coffee together? A mobile location based system could arrange everything automatically.
There already are a couple of PDF readers that are written in Java. Consider porting one to the Android platform and creating a user interface that makes it fun to read and navigate on a small screen.
On mobile devices application performance is essential for success. More performance means less battery usage, longer battery life and less weight of the device. A profiler that is runnable on the device will help to allow developers write good Android apps and strengthen the Android platform.
Consider writing clients for Remote Desktop and for VNC for Android. Think about how you could make remote control even more efficient on a small screen. Maybe you would want to include remote clients for popular mail programs or a remote improved file explorer with a UI written for a small screen.
It is not necessary that we all commute with one person in one car. We can do better than spending a tenth of our awake life in traffic jams and we can also do better for protecting our environment. A location based system could discover that two people always take the same route at the same time and it could organize to put them together in one car.
It would save time to read RSS feeds when travelling. You may want to take a look at the open source project RSSOwl for Java sources how RSS is accessed. Maybe the phone could read feeds to you out loud, so you could listen in your car?
You are in a city that you have never been before. Wouldn't it be nice if your phone could take you on a sightseeing trip through town and explain all places of interest to you?
If you have a device with a small screen and a microphone, what's more natural than talking to it to tell it what to do? It may be ambitious to program Perl this way, but for sure you can talk your device into "Take Picture And Send To Steve".