Although I’ve been building Android 2.2 (Froyo) from source, I’ve been too busy to play with it on a device. Yesterday evening, my phone got an OTA update and I’ve been using it intensively since. These are the first things I’ve noticed, and they’re all good*:
I really like the button combination at the bottom of the stock home application. Three things I commonly use my phone for: making calls, running apps and browsing, all clustered and available from every page of the home app.

The scrolling in the UI is much much smoother. It’s across every application — so either ListView got some magic dust sprinkled on it by the Froyo fairy, or the JIT is demonstrating its effectiveness; swiping the home app is much smoother too.
The Call log screen now groups sequential calls to the same phone, it prevents multiple attempts to call someone from cluttering-up the log. It’s visually a bit busier, but in practice makes the UI quicker because there’s less scrolling.
It’s going to take developments on a number of fronts to resolve all the Android Market issues. But any improvements to the UI are welcome and there are definitely some. Comments can now be rated in addition to being flagged. Comments are now on a separate tab; I like this, it’s more intuitive, faster and fairer (the last 3 comments now hold less sway). A “Did you mean” feature has been added to the market search too. Undoubtedly useful for clumsy screen typists, it doesn’t appear to be on-a-par with the same feature for web searches.

None of my applications broke (AFAICT) and all of the applications I use on a regular basis have continued to work seamlessly. This is a characteristic of the Android releases in general: as the platform has matured, fewer and fewer issues have arisen on each update (at least from my perspective as a developer).
The stock keyboard now makes entering punctuation much easier. This was always a pain-point for me. Hitting space after a word now suggests common punctuation symbols. Perhaps reflecting the times we live in, the exclamation mark gets top billing (the amphora gets a place too). I’m slightly surprised by the presence of the underscore in the absence of the hyphen.

The new debugging notification icon is far better than the warning icon it replaced which so generic it could become confusing. A small but very welcome improvement.
The power control widget includes “Auto brightness” as an option. I don’t tend to use it, but it fills a hole in the widgets usability.

There is one negative - which doesn’t really qualify as a mark against Android itself: Flash performance. I’ve maintained a disinterested perspective on the desirability of mobile devices running full-fat Flash. I can see that users want access to all the website content they are familiar with, and the value to individuals and companies who have already invested lots of development in Flash is obvious. But I’ve always been skeptical of its suitability for mobile processors. It seems this is a hurdle they have yet to overcome, combined with the repeated browser crashes the Adobe Flash plugin induced, my skepticism has only grown.