Here at Insanetek, we're big fans of XBMC. For those of you who don't know, XBMC is a wonderful media center program that's supported across Windows, Linux, OS X, and with some work you can get it on other devices like Apple TV's and Raspberry Pi's. It supports just about every codec for audio, video, and images, and is just all-around a great media center. Personally I'd say it's better than Windows Media Center. A new addition to the wide range of systems that XBMC can run on is the Android operating system. This isn't just a remote or a thin client (a thin client is one that requires a server to do all processing and storage), it's a fully-featured program running on Android that does everything that its desktop-cousin can do. An increasing number of set-top boxes have been running Android, so this is going to make those set-top boxes even better.
Right now this is just an announcement. There's no beta going on quite yet. But, as XBMC is open source, the source code for Android is available if you want to tackle that challenge. If you're worried about how the designed-for-TV UI will work on a smaller device like an Android phone, don't fret. XBMC can be skinned, and there's already a skin for smaller devices. Currently only software acceleration is available, but people are working on hardware acceleration. The main problem with that is that Android has been put on just about everything, so it's difficult to support all the hardware that Android runs on.
Read the full announcement here.