This is a huge part of Android that, IMO, doesn't get enough press. On the iPhone, an "app" is a silo. You run it, it takes over, you go back to the home screen, it stops (modulo some limited background processing in iOS 4).
On Android, an "app" can be seamlessly integrated into the entire system. Think "extension" in classic Mac OS. My first experience with this in Android was "Rings Extended," one of the first apps in the market. It can (at your option) COMPLETELY REPLACE the ringtone selector, system-wide. Other "apps" can completely replace the home screen (OpenHome, aHome were two early examples). Other "apps" can complete replace the system-wide keyboard.
[disclaimer: I work for Google but not on Android stuff. My experience on Android is 100% based on phones my employer gave me for free.]
...and Apple had SO MUCH luck with that in the classic Mac OS, along with its recapitulation in the form of InputManagers in OS X.
Apple wants everyone to be able to take the same basic UI for granted. They still have a few more years of iteration to go before their UI paradigms solidify, and they really don't want a bunch of fucknuts spoiling their future by dragging in a bunch of WIMP shit. They want nothing to do with the adolescent themers on xda-developers, and are happy to be the Facebook to your Myspace.
They know full well that if they allowed side-loading, their active userbase would mean that there'd be lots of mainstream press coverage of shit like UI full conversions. DO NOT WANT.
On Android, an "app" can be seamlessly integrated into the entire system. Think "extension" in classic Mac OS. My first experience with this in Android was "Rings Extended," one of the first apps in the market. It can (at your option) COMPLETELY REPLACE the ringtone selector, system-wide. Other "apps" can completely replace the home screen (OpenHome, aHome were two early examples). Other "apps" can complete replace the system-wide keyboard.
[disclaimer: I work for Google but not on Android stuff. My experience on Android is 100% based on phones my employer gave me for free.]