The layout editor now supports previewing the various "operating system" bars that are included when you run your layouts on actual devices or emulators. This gives you a better sense of how much screen real estate is available for the targeted screen type.
The set of bars shown depends on a variety of factors. Here's a typical phone screen:
You can see the notifications bar on the top with sample wifi and battery icons, followed by a title bar (which lists your application name), followed by the actual layout which in this case is a simple label.
You can switch your layout to the "NoTitleBar" theme, and in that case the title bar is omitted:
In Honeycomb there is a new ActionBar, and some themes can include it:
Finally, for tablet sizes, you get the navigation buttons on the bottom as well:
(This requires Android 3.0 as the render target, though the plan is to backport this and related changes to the rendering libraries for 2.x).