It's amazing how easy one could start developing for Android. Besides investing into Java knowledge, amount of money investment is quite low.
If you already have computer with Windows, Linux or MacOS, Android SDK could be downloaded for free, as well as free Eclipse IDE with special Android Development Tools plugin. Applications could and should be debugged in built-in emulator that comes with SDK. Emulator automatically launches when running application for debug. Release of Adobe AIR platform for Android, as well as upcoming version of Flash Builder will provide tools for developing Flex application packed as native .APK files for Android. This approach opens even wider opportunities for developers to develop for fast growing platform. In our lab we decided to go with dedicated machine for learning and presentation of Android projects. We got Acer Aspire 2GHz/2GB RAMP laptop with Windows XP installed. Then we installed SDK, Eclipse Helios and Android development plugin. From that point it become possible to debug applications in emulator. To test applications on device we grabbed Acer Liquid E with pre-installed Android 2.2 ('Froyo') from local retailer. Windows XP required drivers for this device, after having installed, all capabilities of debugging on device over USB become available. Both from Eclipse SDK or Flash Builder, running application on device was just a matter of pressing 'debug' button!
To start developing for Android you don't need no paid subscription or pricey tools, hardware is only what will cost you a buck. Combined, price of low-end laptop with pre-installed Windows and mid-level Android phone will not exceed $800-$1000 - that is perfect for small teams that want to jumpstart their Android development.