This is great news for Archos; putting Android on their devices will really bring them to the forefront. I love the latest Archos 5 hardware but the underlying OS leaves much to be desired. I recently spent some time with the G1 mobile phone and while I was not blown away by Android it is moving in the right direction. That said in its current state it still is eons above the current Archos OS. So I hope they are replacing all of their device OSes with Android.
Also keep in mind that Achos has a 3G version of the Archos 5 (called the Archos 5 IMT)- the size it won’t make for a feasible phone, but perhaps a very usable mobile tablet. Additionally, there are a few attachments like GPS and TV to add more goodies to the mix.