Google is pushing a new paradigm in application development. Long running processes are easily suported. their example is the media player. The gui that you use is a transitory thing, but the media player and its playlist are long lived. working as you use other guis. This is just how linux's media player daemon works and its awesome to generalize that to many apps.
The applications themselves are a distributed platform. If your contact book needs to pick from the gallery of photos on the screen, it makes an Intent request. A module registers an IntentFilter to satisfy that request. All apps that need to pick a photo can reuse this module. If you drop in a new photo picker, all apps suddenly use that module. Apps can also register for notifications from the Location Manager. Notifications such as lat/long reporting or proximity to a given lat/long. It will use cell tower and/or wifi IDs to geo-locate if no GPS is available.
(a bit fuzzy here) but there is lots of support for using GData APIs and general services that live 'in the cloud'.
The XMPP(Jabber) protocol is the RPC Mechanism! Currently only the google talk servers are supported, but assumedly any XMPP server will be usable.
Android may explode in popularity next year.