The Observer (originally of Manchester) has a post on how Orange and Google are working together. The google phone is already here. You can get google mail, google maps, google local and google calendar (third party) all on your mobile in a mobile freindly format.
We already know people don’t buy phones because of the network, they buy the phone they want on which ever network gives it to them cheapest. They also buy them based on what they look like not the OS they run.
I don’t think a google phone will be a hit, I think a iPhone will becuase it’ll look cool.