There is no g-phone from what Google now tell us. Rather then a G Phone you will be seeing Android which is a software stack for mobile phones including an operating system. By using the Android SDK, developers will be able to create their own software. Android sets all applications equal, meaning that you can get rid of the dialler, change the home screen etc… and make the phone very customised.
The video demonstration above shows various apps such as maps, streets, Quake, a 3D earth. The whole system looks great and very promising. To generate interest in Android, Google are giving away $10M to developers in a challenge to create great apps.
For more details check out Android.
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