The National Security Agency (NSA) just announced their security enhanced version of Android, dubbed SE Android. Stephen Smalley of the NSA recently explained what SE Android does at the 2011 Linux Security Summit. Basically it brings Mandatory Access Control to Android’s Linux kernel and it works to protect against malicious exploits. Every file and folder that Android has access to can be locked down with encryption.
To build SE Android, you need to download and compile the latest code from the Android Open Source Project (AOSP) and put SE Android on top of it. It’s intended for emulators and the Nexus S, but there won’t be much support. You need to be familiar with Android from source and Linux/Unix-based systems.