I've written a small application called WebViewDemo that shows how you can add web content to your application. You can find it in the apps-for-android project. This application demonstrates how you can embed a WebView into an activity and also how you can have two way communication between your application and the web content.
A WebView uses the same rendering and JavaScript engine as the browser, but it runs under the control of your application. The WebView can be full screen or you can mix it with other Views. The content for your WebView can come from anywhere. The WebView can download content from the web, or it can come from local files stored in your assets directory. The content can even be dynamically generated by your application code. For this example, the HTML comes from a local file called demo.html.
This application does not do very much: when you click on the android, he raises his arm.