Recent rumors earlier today from a source familiar with the situation reported that "although a large number of people are hard at work on the Gphone and the open-source operating system/platform for mobile devices (Android) the actual Gphone will not be ready for release this year.
The Android Dream phone demoed during the keynote wowed me along with a whole bunch of people at Google IO as well as those that didn't attend. As far as I'm concerned, Google along with OHA partners are on track to announce Android-powered phones this year.
Google Spokesperson had this to say regarding my inquiries into this matter: "We're still on track to announce Android-powered phones this year. Some of our partners are publicly stating that they plan to ship Android phones in the fourth quarter."
When asked whether Google is getting into the business of making hardware, a la the gPhone, I was given the following statement: "We hope the Android platform will spur the development of thousands of different kinds of phones. It's too soon to tell what forms these phones will take, but we've excited about the possibilities this kind of open platform will engender, and the benefits that users will ultimately enjoy. We envision phones that will feature more engaging, easier-to-use interfaces and a rich portfolio of applications -- all of which will make it much easier to do more with the phone than just voice calls or simple messaging." - Google Spokesperson
Well there you have it, if Google says Android is on track to announce Android phones this year, that's good enough for me.