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: