Has anybody blogged about this comparison, or does anyone want to give it a shot here? Would be nice to see some reasoned thoughts on Adobe AIR on Android vs. the "native" Android SDK (in Java).
Edit: Despite few views and no answers, I'm leaving this question up here since it's a topic that needs to be covered at some point... but if it gets no attention I'll delete it in a few days.
I think it's ultimately very similar to the question of whether to use AIR or Java for a desktop application. Ultimately it comes down to three points:
Does AIR do everything you need? Obviously the android SDK gives you complete access to device capabilities, but AIR purposely doesn't, in order to stay portable. For example, AIR may not support intents, at least initially (I don't think Adobe has announced yet one way or the other). Also, AIR requires Android 2.2. If those limitations are troublesome, regular android SDK may be best.
Are you looking to make something that would be well-suited to doing in Flash? If you're planning a design-heavy app with animations, video, sound, or the like, then building it in Flash may be significantly easier than using Java. On the other hand, if your app will be pure code using only standard visual components, then it might not make a lick of difference which platform you use. Or on the gripping hand, if you'd have existing Flash animations or the like, then trying to shoehorn them into a Java app will be bothersome.
Are you targeting other platforms besides Android? If so, AIR may be a big win, as the same app content should run on windows, mac, linux, and later on, other devices that plan to support AIR, like Blackberry, some TVs, blu-ray disc players, etc. If you are only targeting Android, AIR may lose some of its appeal.
I hope that helps some. Realistically, unless you're effectively locked out of using AIR because you need something it doesn't give you, or effectively locked into using AIR because you're doing design-heavy work and you need the tooling, then I think the pros and cons of the two SDKs are largely questions of convenience. Either platform will work, so it's merely which will get you to the finish line the fastest and most reliably.