The android SDK isn't set up to run python per-say. Python for android runs through Android Scripting Environment (ASE). You can find more information on ASE at there website. They have plenty of tutorials. Most libs that are native python code will work. You can't embed any C, or do low level operating system stuff with the os module or sys module.
As for any GUI's, no. At the moment there isn't any "real" GUI support. You can do some simple dialog stuff, like asking for input or displaying simple menus. I have a little dialog sample on my site.
As stated before, anything written in pure Python, will work with ASE. You can even use Twisted framework for web servers. I also have an example on my site of using Twisted. Using the web server way of doing things, not just with Twisted, you can achieve a real working GUI via a web browser.
