Android as an OS is open source, the Android Market isn't. The market is completely controlled by Google, and since you can still install .apk files without using the Market I don't think this is such a great deal as Engadget paints it to be.
Well, except Honeycomb. From what I've been able to tell, that will only be open sourced when Ice Cream Sandwich is released, which appears to near at the end of the year.
Totally unrelated: interesting phrase, that "The market is completely controlled by Google". Especially given the (accidentally, I assume) missing capital M, it made me think of the "is App Store a generic term?" discussion. I think your post shows that generic words can, at the least, come very close to being specific terms.