The iPhone isn’t too crash hot, you know. It’s currently missing 3G functionality and is a closed system that’s hard to work with. Some of this will change soon, as Steve Jobs announced an SDK during his Macworld keynote, but those missing features haven’t and won’t change how Apple is marketing it.

What makes people moist whenever they use the iPhone is its interface, which is a real breath of fresh air compared to the current stale offerings from other handsets.

A lot of big companies such as Google, Intel, Nvidia, LG, Motorola and others have noticed this, and banded together to form the Open Handset Alliance Project (OHAP) to try and solve the problem. They have created Android.

Android was once an idea in a small start up, before its acquisition by Google in 2005. Now it's Linux for mobile devices. This means it’s secure and its application programming interfaces (APIs) offer complete access to the phone hardware. Even third party applications get deep access, which other operating systems can’t provide. It even virtualises everything in the name of speed and security.

For now, the OHAP has only developed phone and web browser applications for Android, however other cool applications are being written by the rest of the open source community. To encourage this, the OHAP has put US$10 million in prizes up for grabs for the most promising applications for Android. And although the applications may be on their way, Android’s core has been here for a while.

And it’s just been hacked to run on standard hardware.

Back in November last year, shortly after Android’s public release, Australian developer Ben Leslie almost got Android running on a Neo1973 phone.

Soon after, as a result of his work, Android was running on an Armadillo 500, a generic board used for prototyping and embedded systems, and more recently, a group called eu.edge successfully booted Android on a Sharp Zaurus. They even suggest that it can run on almost any ARMv5TE based device.

This should open the floodgates for tinkerers (GoogleOS on your PC, anyone?), which might even result in a version of Android forking away from mobiles and into household gadgets.

For the rest of us, and for now, Android is promising a much better smart phone experience than traditional mobile OSes deliver. The interface’s design can be customised, so we’re just as likely to see simplistic but efficient designs as we are to see rich, 3D accelerated portable media centres or iPhone competitors with unlimited flexibility. And with the actual core OS completed, the first consumer OHAP mobiles should be here in the not too distant future.

Enough speculation though: if you would like a share in that US$10m, download the SDK and get cracking. The top 50 applications developed before the 3rd of March get a slice, with another challenge slated later this year. The SDK and details are all available here.