A colleague of ours just got a new Nexus One device and I just had to try LWUIT on it...
I used Thorsten's port to get started and made some minor UI tweaks using the resource editor. In the process I also added a new LWUIT feature (pure touch) to make the UI behave closer to the way it does on Android/iPhone devices (show focus only when using the keypad and hide it when not using the touch screen).
The result is in the video to your right, which I feel is pretty close to the performance/behavior of native Android applications and in some regards exceeds their capabilities (e.g. Tensile drag on Lists, Text components etc.).
The advantages of working with LWUIT on Android is identical to its advantages in JavaME, you can get fixes for LWUIT and statically link it to your application thus reducing your dependency on platform changes. This by definition makes LWUIT more resistant to platform fragmentation in Android just as it does in JavaME & BlackBerry devices (and hopefully on other devices as well).