Eldarerathis summarized it very well. To add some things: The 1.1 version was internally called Petit Four by Google, and that's how it all began. Google is installing a giant pastry on their lawn at Mountain View each time a new version is about to be launched.
You can see pictures of that display at different stages here:
Overall display (Cupcake to Eclair, with Nexus One) http://farm5.static.flickr.com/4030/4453391412_8ec6dfa2a8_o.jpg Donut, Android logo, Nexus one, Cupcake, Eclair
Eclair, Froyo, Gingerbread, Honeycomb and Ice Cream Sandwich http://www.androidguys.com/wp-content/uploads/2011/10/ice_cream_googleplex.jpg Froyo, Gingerbread, Icecream Sandwich
Gingerbread, Icecream Sandwich, Jelly Bean