Mile
Zero

As an example of what Android's doing right, it's hard to top Locale.

1. It's approachably awesome: You don't have to be a nerd to see the value of automatically putting the phone on vibrate whenever you get near your office. Ditto for the ability to change ringtones based on time of day, or turn down the screen brightness when your battery gets low. This isn't some overhyped toy like augmented reality, it's a useful improvement that an average person can appreciate.
2. It rewards creativity: Want to silence the phone by flipping it over? Turn on Bluetooth only when at home during certain hours? Lower the in-call volume when specific contacts with loud voices call you? Locale can do that (out of the box, no less).
3. It's extensible the Android way: Locale leverages one of Android's most unsung features: the Intent message-passing mechanism. That makes writing a Locale add-on as easy as exposing a couple of preset Intent filters in your package manifest. Thanks to that kind of extensibility (a key part of the Android experience), you can get plugins that send SMS and Twitter messages, react to headphone or docking events, turn your computer on via wake-on-LAN, or hook into your to-do list for location-based reminders ("Buy milk when near the grocery store").
4. It reaffirms the value of multitasking: Locale is only effective because it's always running, even when you're doing something else. You can't fake this functionality with a hack like push notifications. And despite the conventional wisdom about multitasking and battery life, Locale uses very little juice. In Android's battery usage stats, it's typically the bottom of the list, dwarfed by the demands of the screen and wireless radios. That's partly smart scheduling (Locale requests its updates in ~10 minute intervals batched with other programs, and evaluates low-power conditions like time before more expensive options like GPS), but also simply because the energy consumption of multitasking systems has been grossly overstated.

When I first started using the ADP1, Locale was one of the programs I tried and uninstalled, thinking that it was nice but overkill for my needs. As time went by, my alternatives for settings automation succumbed to either developer neglect or ridiculous feature creep (nonsense like task killers or banner ads), and had to be removed. So when Two Forty Four AM, Locale's developer team, recently released a for-pay 1.0 version, I gave it another shot, and was pleasantly surprised. During the past year, they've refined it into a polished, sharply-focused utility that's well worth the $10 asking price.

Reviews of Android phones often fault the platform for missing some single application that the reviewer has decided they can't live without--a specific Twitter client, for example, which says a lot about the priorities of tech bloggers compared to normal people. In my opinion, though, Locale really does provide the sort of functionality that ought to be a deal-breaker for other platforms, and it's a must-have for Android users. After all, isn't this sort of automation kind of the point of a "smart" phone?