As I have begun to tinker around with Android, I find more and more free tools for doing so. Here is a list of what I have found so far. I am sure (positive) it is not a complete list and please add to it if you care to. The Android SDK is a given for all of these solutions.
1) Eclipse and The Android ADT plugin - This is what I am using at present.
2) IntelliJ IDEA
3) MIT app inventor - I made a simple app with this - pretty cool
4) Appcelerator Titanium
5) Processing for Android
It's great to work with a system that gets so much support and coverage.