Sure, the T-Mobile G1 is pretty nifty with its slide-out screen and QWERTY keypad but if Android is going to compete with Apple's iPhone OS it's going to have to step up the game just a little bit. Going by the Android Open Source Project roadmap, it looks like that's the plan with a particularly interesting development scheduled for Q1, set to provide touch screen keyboard inputs on Android.
Specifically, the development relates to the implementation of an Input Method Framework and Input Method Engines. The former will provide a framework enabling support for soft solutions created using the latter, which can then interact with the rest of the OS. Those applications can then be made available via the Android Market.
Hopefully that doesn't mean Google won't be providing its own system-wide touch-screen keyboard interface, instead providing only the backbone. As likely as it is that the development community will come up with some great offerings, we'd rather see Google do it for us all!
Watch out iPhone, the robot revolution is coming.