Here some benchmarks and "real world" tests of the Webkit -based Android Web Browser

V8 61.9

HTML5test.com 118/160

Acid3 93/100

Animation Benchmark (here)

html 5 fps

canvas 8 fps

svg N/A

flash 14 fps

Canopy (here)

It runs quite smooth

Facebook

It works on Dolphin Browser because it can set "Desktop" as user-agent or you can try the Facebook App. The chat is broken but you can access it via Meebo IM App

Youtube

It works thanks to the Flash Lite plugin.

Megavideo

Partially work. Some videos don't load with Flash lite

Google Reader

The mobile/iphone version works

Notes

Some limitations are due to the missing emulation of a mouse pointer. Some events like "Drag 'n' Drop" are not recognized so the page loads fine but then you can't interact.

Even complex web pages with popups are quite usable.

(Alice, an italian free SMS Provider. The overlay window isn't zoomable)