After wrangling all the necessary code bits together I got the demo code running on the Arduino board and my Nexus One.
The first picture you can see the phone reading the sensors of the demo shield, button states, the temperature, a light sensor and the joystick position.
In the second picture the phone is controlling the led colors and has one relay turned on.
In the last picture you can see that the phone detects the board being plugged in, Android knows there is no app installed for the board and it cannot be found in market.
The Nexus One is running a rooted 2.3.4 ROM from this thread
P.S. Mod's can we get a forum section for Android Accessory Development?
Now for Pics.