Regardless of how practical or useful its interface on a netbook would be, the idea sounds cool and innovative as well, considering most manufacturers want to stick to what's tried and true. HP doesn't mention why they are considering Android or what specific feature set they are going for. However, if netbook manufacturers want to lower the price of their devices to make them more attractive, the licensing cost of Windows will become even more of a consideration.
I hope HP does decide to go for an Android based netbook. The worst case scenario for them is finding just what Asus found, in that even with an alternative offering, Windows still dominates market share on netbooks. Or, perhaps, HP can change that?