Looks like they are already releasing source code.. (and some details about their hardware (YES, it looks like there will be a google branded phone!)).

Mail from Brian Swetland (swetland@google.com) to LAKML.
The Android systems team at Google, with massive support from Qualcomm,
has been working on support for the Qualcomm MSM7K family SOC for some
time now. We are happy to announce the public availability of this
ongoing work:

Git Repository: git://git.android.com/linux-msm.git

Gitweb URL: http://git.android.com/?p=linux-msm.git

This is initially based on v2.6.23, but we will be making a 2.6.24-rc
based branch available shortly and welcome suggestions for making
these changes suitable for inclusion in the mainline kernel. Comments,
suggestions, and patches are extremely welcome.

Currently this tree supports the Qualcomm MSM7200A SURF Development
board (MACH_HALIBUT). Hardware support includes onboard serial, i2c,
timer, NAND flash controller, MDP/MDDI framebuffer, gpio controller,
and high speed USB client controller.

Basic support for the shared memory interface to the basebande core
is included (and much more is on the way). Currently this includes
the shared memory stream channels, a TTY driver on top of them, the
QMI control channel, RMNET (virtual ethernet channel and driver),
and RPC Router.

We've also set up a mailing list for discussions specific to this
architecture, in case that may be useful:

Mailing List: linux-msm-kernel@googlegroups.com
Subscribe: linux-msm-kernel-subscribe@googlegroups.com
Groups URL: http://groups.google.com/group/linux-msm-kernel

Many of us are new to git and contributing to the Linux Kernel, so
expect the repository setup and branches to be a bit volatile until we
figure out the best way to make this work.

Thanks in advance,

Brian Swetland
Linux Kernel Lead, Android Project, Google