Live Android is a bootable CD of android to run on the desktop. Lovely jubbly!
http://code.google.com/p/live-android/
I installed it on a virtual box tonight and it’s really very very good. Can’t get SD card support working yet, so no custom app, but it gives those without the luxury of a phone a chance to play.
Screenshots of the virtual box install:
http://www.cokeandcode.com/android/liveandroid1.png
http://www.cokeandcode.com/android/liveandroid2.png
http://www.cokeandcode.com/android/liveandroid3.png
Another interesting one, looks like SD card support is in the next release
Kev