In the video demonstration of Live Folders on Better Android, you can see how this will work using the social news web site Digg.com as an example. But the potential for what this feature can bring to the Android platform goes much further than just delivering a cool, new way to check out Digg top stories.

With real-time live updating folders such as these, it's easy to imagine how any web site could take advantage of this feature. Live updating RSS feeds or top stories from your favorite news source? Yes! Real-time stock quotes or fantasy football updates? Sure! And that may only be the beginning...the potential is there to expand the technology into other applications, too. For example, a live-updating RSS reader.

Also, since Android apps can run in the background, a Live Folders-enabled application could display update-related info right on the phone's homescreen similar to how an email application displays the number of unread messages. In an Android RSS reader application, that information could be the number of unread news items, for example. For other applications, though, the technology could be used to change the icon itself for a more subtle type of notification. Anything's possible of course, but for now Android users will have to be content with the way Live Folders currently works. However, that's still pretty impressive.

According to Android Developer Joey Sochacki, the latest version of Cupcake is solid and he suspects that it could be ready for public consumption in only a matter of weeks if Google's Android team wanted to deploy it. Considering that there will be major announcements today surrounding an update to the iPhone software, Google may want to prepare to release something exciting of their own, too.