And by "Google Phone" we don't simply mean another Android handset. We're talking about Google-branded hardware running a version of Android we haven't yet seen.

Over the next few weeks, Google Phones (most probably in early, prototype form) will flood the Mountain View campus. They'll don large LCDs while running a new version of Android—either Flan or the version of Android beyond it—which our source spotted running on Google's handset as well as a laptop. (Whatever the software was, it most certainly wasn't Chrome OS, we were assured.)

But maybe the most intriguing bit is what someone said to our source offhandedly, that the current Android, the we all know and love, is not the "real" Android. So what makes for a "real" version of Android?

Our best guess is an Android OS with Google Voice at its heart.

Oh, but not just any cell phone: A version of the G1 currently sold for $179.99 by T-Mobile, which runs Google's Android operating system. Android is the fruit of Google founders' Larry Page and Sergey Brin's strange obsession with the wireless market, launched in a fit of jealousy over the growing number of phones running Microsoft's Windows Mobile. (Imagine that: Google, jealous of Microsoft for a change.)

In an email, Google management blames the economic crisis and suggests that this is a great opportunity to "dogfood" the phones — an unappetizing tech-industry euphemism for testing products in-house. This is what has become of the company that was once deemed the best place in the world to work: Cancelled bonuses and unpaid labor. Here's the memo:

Googlers,

The holiday bonus is a Google tradition - it's a great way to thank everyone for their hard work. In the past, we've done this in cash. This year, we've decided to give Googlers a different kind of present - a Dream phone (this is the same device T-Mobile markets as the G1). We're really excited about getting the phone to more Googlers in more countries, and also seeing all the cool new things you do with it.

Shipping these special edition phones in such a short time frame (they were designed especially for Googlers with a 'droid' on the back) and making sure they would work anywhere in the world was no small feat. So a big thank you to the Android and Legal teams for making this happen. While these phones do not have SIM cards, they are unlocked so they can be used with the network provider of your choice. Plus - thanks to more fancy footwork from the Android team - they'll work immediately as WiFi devices!

Sadly, despite all our best efforts, there are some countries - India, China, Brazil, Korea, Israel, Russia, Argentina, Taiwan, Hong Kong, Mexico, Turkey, Kenya, United Arab Emirates, South Africa, Egypt, Chile, and the Ukraine - where even our legal team could not work their magic. Googlers in these countries will receive the cash equivalent of the phone in their December paychecks, which is about $400 USD. Overall though almost 85% of Googlers globally will be able to receive the phone - including the United States, Western and Central Europe, Canada, Australia, Singapore, and Japan.

The holiday gift team in your office will be sending out an email with logistical information on distribution shortly. We know that some of you are already on your holidays - don't worry - your phones will be waiting for you when you come back! For more information, check out the FAQ here.

Some of you will of course be wondering why we decided to change from a cash bonus to the Dream phone. Here are the reasons. First, we've never developed anything like the Android software before and this represented a unique opportunity to celebrate that achievement. Googlers globally have been asking for the Dream phone and we're looking forward to seeing all the different things that you do with them. This is a chance for us to once again dogfood a product and make it even better! Second, as we discussed in our email this week, the current economic crisis requires us to be more conservative about how we spend our money. We felt that giving the Dream phone would be a great holiday present - something we could all celebrate.

Thank you for all that you do to make Google the company that it is. We hope that you will enjoy using your Dream phone in 2009 and have a very happy holiday!

One tipster notes:

The boxes appear to have magnets to keep them closed, instead of tape — open box discount for Google?

Since the phones are customized for Googlers, the suggestion that these are leftover G1s which went unsold at retail is unlikely. Can you get your hands on one? It will take some bravery to put them up for sale on eBay, magnets or not. But hey, times are tough all over. Even at the Googleplex.

If you've already hooked up a Web server to your garage door opener you're waaaaay down the path to madness, so you know, why the hell not build a mobile app to control it?

Sippey should be aware of just how far down the path to madness Fitzpatrick is; the two worked together until last year, when Fitzpatrick left to join Google and Six Apart sold LiveJournal to the Russians.

The test was rigged deliberately. That's the kind of thing we've been up against here, and I find it despicable.

Google explained that the wireless microphone frequency was hidden behind broadcast television signals. When asked if Page felt the FCC aided in the subterfuge, Page demurred, blaming broadcasters instead. A spokesperson for microphone manufacturer Shure, Mark Brunner, shot down the accusation, "These tests were open to the public, and those who choose to discount the results — which have not yet been published — had every option to be present and to witness them for themselves." Just remember, Larry: It's not paranoia if they really are out to get you. (Photo by AP/Paul Sakuma)

It’s funny - but the first time I heard about Android was about 2.5 years ago, when Eric Schmidt told me about the device at Stanford after I got a job offer from Google (yet before I accepted it!). Since then I have seen many iterations of the software. The software. Not the device itself, because sadly it hasn’t changed in many years. The reason many people see the phone as ugly and old-fashioned is simply… because it IS! It’s a design unchanged for at least two years, without iterations on it besides color schemas (it’s now available in Zune-brown along with white and black) and the silly ‘with Google’ description on the back. Don’t ask me what ‘with Google’ means. I didn’t understand it back then and still don’t understand it today.

Not only did it end-run the App Store, it cut Apple out of its 30 percent take on the fee. No more, though. Apple has shut down access to the ad hoc license system. I wouldn't go so far as to claim Apple's iron-fist approach will cause consumers to switch phones. But there's an obvious angle for Google: Play up the goofy apps like Pull My Finger that Steve Jobs wouldn't touch. Because if you've ever watched a bunch of drunk twentysomethings playing with their phones in a nightclub, you know that stupid and entertaining often beats pretty and functional.

• Specs: 3G, $179, Amazon MP3, App Store, 1GB, Copy and Paste
• The Google apps work great.
• You can swap out the battery to avoid recharging on the go.
• But it lacks the iPhone's finger-flick UI.
• It falls short of Apple's music, picture and video apps.
• T-Mobile's high-speed network is not so widespread as AT&T or Verizon. Check before you buy.

Brin told the crowd how tinkering with the G1 gives him pleasure: "It's just very exciting for me as a computer geek to have a phone I can play with and modify." Page mostly stood there with a silly grin on his face.

Contrast the willy-nilly performance with Apple CEO Steve Jobs's meticulously planned iPhone announcements. It serves as a convenient illustration of the differences between the Apple's mobile strategy and Google's. Apple's iPhone offers millions of consumers a simple, structured experience — just as Jobs's bullet-point keynotes focus on marketable sound bites. The G1 is an open, developer-friendly phone that — like Brin and Page's slapdash appearance — thousands of geeks will appreciate and few consumers will bother to decipher.

"It is still just a phone running on a fourth-placed proprietary network," writes Blankenhorn. He says Google won't realize its full vision for Android — "a handheld Internet client running on a true broadband network" — until Clearwire finishes building a new wireless broadband network, backed in part by Google's money. That's supposed to happen by next year, but even Clearwire CEO Ben Wolf is skeptical: "They say the middle of next year. I'll believe it when I see it." Notice how no one's talking about whether the Dream is actually fun to use?