Consider a generation not used to the analogue wrist-watch, and give them a clock face with an outer 24-hour clock and an inner 12 hour clock, and then ask the user to select time using the tip of their finger, on a small phone screen, on the inner or outer circle to the hour and minute that they wish.
http://3.bp.blogspot.com/-SK2ljlhHiCU/UaiEjF1lhGI/AAAAAAABJq...
Oh, and that top bit... the time that most people would read and want to change? Yeah, that's just display. Tapping that does nothing useful, just flips the mode from hours to minutes but you can't change the time that way.
So: A modal interface, on a circular control, with small areas of touch, that you cannot navigate one-handed accurately, and that uses the least popular display of time.
Personally, I rather like the new time picker and have never experienced any usability problems. Also, the appearance depends on your time settings; the inner circle the parent poster mentions only appears if you use 24-hour time.
Which is only the vast majority of the world (about half a dozen countries use 12h clocks as a standard in written form).
(as it turns out, that means the vast majority of the world won't give a fig about the AM/PM selector being broken, the touch targets are a much bigger issue)
The standard time picker is this one: http://developer.android.com/guide/topics/ui/controls/picker...
I actually love that picker a lot. It's efficient when you use it with one hand it it's not nearly as confusing as the alarm clock one which would break down completely if you would have to target a specific date.