There's a reason I say flirting. They aren't betting all their chips on the web like Palm is doing with the Pre, and instead are being more pragmatic. However, this conference was interesting in the fact that PhoneGap was mentioned numerous times and the fact that Google showed people how to use what the Dan Morril called "Augmented Ajax".
Augmented Ajax = PhoneGap
What I found interesting from a Hacker perspective was the NDK that was coming out in Donut, the new Edge build of Android. The NDK allows you to run native code and native libraries. Native libraries like libgpg, libsphinx and libpcap. Those are pretty important libraries, and can open it up to having GPG, Wireshark and actual Open Source Voice Recognition for those who don't want to deal with Google Voice Recognition. This adds a LOT of freedom with the apps, assuming that most phones will be ARM.
Things that weren't addressed was the state of the WebView on Android. I wanted to ask the question about WebView and why gears isn't there, but I got the impression that the Google Devs don't really use WebView. I suspect that once Android WebView supports HTML 5, that this will make PhoneGap on the Android Phone concentrate on sensor data, since Geolocation will be baked in by default.
The importance of making PhoneGap obsolete
And I think it's clear by looking at what we do that we bet on the web, we want Web Technologies to win! Open Standards, Open Source and an Open Web helps us do our job better and it helps us work with our clients better and in a more transparent manner. I don't care which platform has the best stuff, I care about which platform has the most open features that I can use anywhere. It's why I run Linux on my personal systems, and it's why I currently do Android stuff. It's not perfect, but nothing is. However, it is a good, pragmatic choice for development that many people can stand behind.