>Specifically for telephony, does one need something else?
Often, yes. Device manufacturers and operators have traditionally been very cautious of allowing low level access to telephony APIs. For instance, getting access to the audio uplink and downlink of a GSM conversation is quite tricky (often impossible) on other platforms, so if it is possible on a real Android device as you indicate then that is a big win. If you get the downlink then you can record calls - not something that everyone wants, but something that certain industries view as essential, e.g. for recording of financial transactions made via a mobile phone. If you get access to the uplink, then you can mix audio into the call. For instance you could make a voicemail system that sits entirely on the phone itself, answering calls and playing messages to callers (when you're in coverage anyway!).
With Nokia's Symbian based phones, it is a constant game of cat and mouse to try and access these things, despite having paid partnering fees, making individual paid requests for APIs, and explaining the business case directly to Nokia. They told me directly that I can't have access to such things, and if I manage it today on certain phones with some creative engineering, then those loopholes will be closed in future. You'd think I was trying to harm their business, not create compelling applications that result in businesses buying more of their phones.
The status quo seems to be based on the assumption that every developer is an evil hacker intent on bringing down the network or sending millions of SMS messages to cost the end user money. To get round this, either you are forbidden from doing anything telephony related, or you have to put up a dialog and ask permission first ("The application wants to send an SMS message, is this ok?"). I have a simpler solution: in order to run software on most phones, I have to sign it with a paid certificate to say it came from my company. If I write harmful software, then revoke my certificate so it will no longer install and I can't distribute software any more. In the mean time, let me innovate, please!