Google appears to have taken its first anti-developer step following the release of the Android Market. Google has removed all phone as modem applications from the Market. These applications took advantage of a java/Dalvik proxy layer, which enabled a virtual network passthrough to a computer, or other device. This is a similar technique that iPhone developers have used on jailbroken iPhones to offer phone-as-modem tethering.
However, unlike iPhone, Google is not taking any additional measures to block tethering applications from running. While untested outside of Google, the company does maintain a killswitch that would allow it to remotely block the access of sold tethering apps, even post-sale.
The good news is, also unlike iPhone, Android developers can sell software themselves. Users simply need to enable unsigned applications in the settings area of their Android phone.
Google and the Open Handset Alliance (OHA) have refused to comment on the Market removals.