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Does this mean we can consider the Google Reader API stable now?
Shame it doesn't work with my Google account (not @gmail). I'd been waiting for this.
interesting note: that menu in the second screenshot is not the normal android style, the Messaging and Bluetooth icons are also not stock.

Is it a peek of Gingerbread or just another theme I haven't seen before?

That's exactly what I noticed right away. I would assume it's a peek at 2.3/3.0 considering that Android "themes" aren't officially supported and are hard to come by, ntm Google is very fond of circulating development versions among its employees.
I agree that the menu and messaging icon look different but the bluetooth icon is the same as on my phone (2.2.1 FRG83D).
>> Volume-key navigation: if you enable this in the settings, you can navigate by using your phone’s volume keys for next and previous

I wonder how many volume keys are designed to withstand that level of frequent use.

I use Dolphin as my web browser primarily because it allows using the volume buttons to switch tabs. I haven't run into any problems and it's convinced me that more apps should offer similar options for using those buttons.
Many book reading applications allow to use the volume keys for flipping pages. This is extremely convenient, because you don't have to move your hand and fingers don't cover the screen. The obvious downside is that sometimes I actually want to adjust the volume while reading a book...
The best such usage I find is to activate the camera. Just feels more natural.
The nice thing about G1 is that it has a dedicated camera button (separate from the volume controls).
gReader is a really solid 3rd party RSS reader, that I've grown completely accustomed to. I'm not sure I really need / want to switch to the official one now.
That's lovely. <Goes back to using FeedR>
I was really hoping for a widget to be included with this.

Are there any third party readers that include that functionality?

Newsroom does... kind of. It places an icon of a designated feed on your home screen and shows how many unread items you have. It's similar to what the iPhone does for a lot of things.
That was my first thought. A widget showing a random headline from your unread articles would be awesome. Sort've like the RSS widget.
I hope they'll update it with this :(
Scanning the QR 404s for me, and I can't find it on the Market.

Is this US-only?

Nope, not US only.

For Google Apps I always put:

pub:"Google Inc."

... as the search term. Then you get a list of official Google Apps. It helps you find their apps that sometimes get lost among all the spam-apps using their keywords.

(I'm in AU and it let me find the Google Reader app)

Without offline support, it's kind of pointless (IMO).
Pointless how? I love to read feeds while on public transport - where I have 3G.
newsrob is the best thing ever. I read on public transit where I have typically 3G -- but all of the content is already local. That means that even when I pass through the black hole of Sunnyvale, I can read without interruption.

I also have it sync up via wifi when I'm sleeping and what-not. I run out the door with all of the content ready.

Agreed, offline access is very useful, but lack of it doesn't make the app pointless
Almost all the public transport I take is underground.

But Google Reader android version is little different from the mobile website itself. It doesn't even show the article text inline.

Actually the application has offline support, it makes use of the standard Android sync API. See Settings > Accounts & Sync > Sync Google Reader. I've just tested it in the Airplane Mode and it works like a charm.
Here are the APKs: Google Maps: com.google.android.apps.maps.apk (4.7.0): http://mrgall.com/android/maps.apk Google Reader: com.google.android.apps.reader.apk (0.8.0): http://mrgall.com/android/reader.apk
Why would you link directly to the apk's? If you install the .apk's separably instead of through the Market, you won't get updates. (At least, the Market client won't notify you of them).
the problem is, that people in some countries don't have "paid" market. but for some reason maps, skype, reader and many many other things are included into that "paid" category, even though they're free.

sorry if my posting's intended for quite small audience, although not all the people live is US and Europe...

I'm pretty excited about this as I've been wanting an official app for awhile now. Every android RSS app I've tried left a lot to be desired. I've also noticed that (with the tiny exception of NewsRob), android RSS apps have pretty ineffective UIs.

This app looks great and has worked excellent so far. RSS on android just became a whole lot better with this release.