ASE is awesome, but it doesn't expose the full android API to python scripts. <a href="http://code.google.com/p/android-scripting/wiki/ApiReference" rel="nofollow">http://code.google.com/p/android-scripting/wiki/ApiReference</a> is what you get currently, though this list seems to be growing pretty quickly.
Project #6 for the Ruby Summer of Code is getting JRuby apps on Android to work:<p><a href="http://rubysoc.org/projects" rel="nofollow">http://rubysoc.org/projects</a>
I've been really happy ever since I installed Python on my Droid. It's really fun to show off how you can access text-to-speech with droid.speak().<p>I'm not sure I buy it will be useful for development without a custom VM, but I have the full power of a 500 mhz (ish) processor wherever I am.
Just to provide a counterpoint: N900/Maemo has had the ability to have apps distributed in an arbitrary language since launch, and Nokia seems to especially like Python, sponsoring the developement of Qt bindings for it etc.