I've been messing with it a little this afternoon. It was very easy to set up, since I am already familiar with Eclipse. I didn't have the JDK on this system, so I installed 6 update 10, and Eclipse Ganymede, and then the android SDK 1.0. The only setup necessary was to add the path to the tools dir to my environment vars.
The emulator and eclipse plug-in seem to work well, although there have been some changes since the beta and the docs haven't kept up in all cases. The emulator took forever to compile everything the first time I ran it, but is seems to work well enough now. Start-up time is about 20 seconds or so.
I've messed around with Windows mobile before, but never really came up with a killer idea. The question for me is whether Android is worth learning? Is it going to be successful enough to spawn a significant market?