I have to admit Android 2.0 looks great. I'm a big fan of the iPhone OS but version 2 of Google mobile OS looks sleek and visually polished. I did not have a chance to play with it yet but the pictures leave a very positive impression. It LOOKS usable enough. Not sure it would beat iPhone in its simplicity but it is a real rival.
The first device available with Android 2 seems to be Motorola Droid. Sadly its design doesn't produce any excitement. Seems very dated and follows the Nokia Communicator idea, which judging from how often I've seen it on the streets, has never been a very popular device.