The X10 (codenamed ‘Rachael' and incorrectly assumed as the X3) is the company's first Google Android based smartphone. For those who are new to the term "Android", Android is a software stack for mobile devices that includes an operating system, middleware and key applications.

There are three central modifications that Sony Ericsson has made to the default Android 1.6 installation
  1.  Taking the lead is Timescape, a spiritual sibling to the MOTOBLUR, which aggregates all of your communications on the phone, whether they be Tweets by your favorite NASA astronaut, missed and placed calls, received text messages, or Facebook status updates. It's all there, in one big gorgeous integrated pileup. Naturally, all that can be filtered by source or by person, making for a seamless environment for interacting with your friends over the otherwise quite fragmented social networking space.
  2. Mediascape does the same for the media on your phone, presenting what you have available locally or online, and making track suggestions on the basis of the song you're listening to or stuff it has discovered your friends like via their communications with you.
  3. Face recognition, which automates photo tagging by recognizing your friends after the first time you tag them, and also allows you to call someone by simply tapping on their face when viewing a picture. (This one seemed great to use personally)

Some of the features found attractive on first usage are

1. Infinity button which basically shows all communication/info related to a person done through the phone(including messages, email, twitter, facebook... Nice).
2. The 3G connection is lightning fast, and webpages are rendered quickly and accurately, with a satisfyingly smooth scroll.
3. Similarly, Google Maps is responsive and relatively snappy, and showed off a little of what the Snapdragon under the hood can do.

Features available are -

The phone comes with a 4-inch TFT touchscreen(scratch-resistant) with 262.000 colors and supports 480 x 854 pixels (WVGA). Weighting 135 grams and having 13mm thickness. Battery is a standard one,  Li-Po 1500 mAh.

It has an 8.1 megapixel camera with autofocus and LED flash. Other features available are 16x digital zoom, intelligent face recognition, geo-tagging, smile detection, video recording.

It comes with 1Gb internal memory and for further extension of the internal memory, microSD card is supported. The processor is powerful having 1GHz-Qualcomm Snapdragon™ QSD8250.

Connectivity options available are: GPRS, 3G, Wi-Fi, Bluetooth, microUSB, 3.5mm audio jack. Gps is available through A-Gps support and comes with Google Maps and Wisepilot(free trial version).

Music section has Album art, Bluetooth stereo(through A2DP), Media Player, Music tones, PlayNow, TrackID.

Messaging comes with: Conversations, Email, Microsoft Exchange ActiveSync, Picture messaging, SMS.

Entertainment features: 3D games, Media browser, Infinite button, Video streaming and viewing, Youtube.

Organizer put you in order with the Alarm clock, Calculator, Calendar, Office Suite, World Clock.

Other preloaded apps are: Timescape(Facebook, Twitter), Mediascape, Sync, Android Market Client, Gmail, Google Calendar+Maps+Talk+Voice, Network Location Provider.

Disadvantages:
It has the same 1,500mAh battery as the X2 and the snapdragon chip is very power hungry.
No FM radio, they could have added that too.

See this video also to see how xperia x10 is