It could be, or he could be moving into a hardware role at Motorola Mobility. <shrug>

Could be. Would be a great pick to drive Glass. Or build robots.

Seems to me that if he were moving to head another high-profile project at Google, it would have been part of this announcement.

Maybe he's leading a high-profile project that hasn't been announced yet.

Wouldn't the announcement mention Andy's new role even if the project could not be named? Without mentioning his plans, it leaves open questions like these, which does not make Andy look good.

I was under the impression that Sergey was heading Glass.

Actually Babak Parviz (the original inventor) is leading the project, which I suppose reports directly to Sergey (https://plus.google.com/100149980664588993669/about)

I never really understood this sort of thing. Why would he stick around and do nothing? To "save face"? And if he is not being useful why do they want him around or play along?

Might be sort of like a non-compete period. Instead of being contractually bound to not compete for a period after leaving a company, which isn't always enforceable, pay the person enough to stick around for a while, perhaps with limited access to information about upcoming products.

They stick around because they have a lot of options that are on some sort of cliff-vesting schedule.