What is near-field communication (NFC)?

NFC is a short-range wireless technology, that is designed to transmit and receive data. Multiple devices can communicate with each other using the same frequency, so you aren't limited to 1 to 1 communication. Based on RFID technology, Near-Field Communication uses magnetic field induction to enable communication between electronic devices. Android 2.3's Gingerbread release actually added NFC technology to the Android platform.

Current Specifications:
-Transfer bit rate: 800kbps
-Frequency: 13.5 MHz
-Transmitter:
PC interface (MAX232A)
Voltage-Controlled Oscillator (POS+25)
Power Amplifier (LM6181)
Loop Antenna
-Receiver
Loop Antenna
Amplifier (LM6181)
Phase Lock Loop (NE564)
PC interface (MAX232A)
-NFC Tags currently offer between 96 and 512 bytes of memory

How will Near-field communication technology be used?
-Mobile Local Payment Solution (POS)
-Peer to Peer Communication Tool, interact with tvs, printers, computers
-Smart Posters and Magazine Downloads
-By 2013, 1 in 5 phones will have NFC and is expected to generate $75 billion dollars in gross transactions (Juniper Research)

NFC Enabled Mobile Phones and Handsets:
BlackBerry Bold 9900 and 9930
Nokia 6131
Nokia C7 (Astound)
Samsung Nexus S
Samsung Galaxy S II (2 Versions one has NFC)
Samsung S5230 NFC (GT-5230N)
Samsung SHW-A170K
Samsung Wave 578

NFC Security: Operating distance is up to 10 cm, which seems to be the main deterrent from unwanted 3rd party breeches. In 2006, Ernst Haselsteiner and Klemens described possible types of attacks including Man in the Middle attacks. Interesting pdf on different NFC security issues.

NFC Forum:
With 140 companies signed on The Near Field Communication (NFC) Forum is a non-profit industry association that promotes the use of NFC short-range wireless interaction in consumer electronics, mobile devices and PCs.

Android Developers NFC Guide
An Android device with NFC hardware will typically act as an initiator when the screen is on. This mode is also known as NFC reader/writer. It will actively look for NFC tags and start activities to handle them. Android 2.3.3 also has some limited P2P support.