Of course Android can be hacked, so what else is new?
When someone says Android, or anything else, is unhackable and that it's just been hacked, they don't know what they're talking about.
Where do people get this stupid idea that something, anything, is unhackable? They surely don't get it from anyone who's ever worked with security. We know anything can be hacked. Take, for example, this silly story entitled "'Unhackable' Android phone can be hacked' from last week.
Uh, I hate to tell you this, but I don't know of anyone reputable who ever claimed Android, Google's Linux-based embedded operating system for phones, netbooks, and tablets, was unhackable. Sure, Android's sandboxed security model is better than say the built-in by design insecurity you find in Windows, but so what? That doesn't mean Android is perfectly safe. Nothing is.
The same is true of Linux, Mac OS X, you name it. Even OpenBSD, which is probably the safest operating system around, has security problems. Repeat after me: Nothing is secure.
To claim as Lookout Mobile Security has done that there is something extraordinary here is nonsense. May I also point out that Lookout makes its money from selling mobile device security and management programs? It's in their interest to scare the pants off Android users. I'm sad to say, from the popularity of this semi-bogus story, that they've been quite successful at this.
Listen, nothing, and I mean nothing, in this world is totally safe. Whether it's crossing the street or using applications, there's always a way for things to go badly, horribly wrong. But, if you look both ways, use only programs that you have reason to believe to be safe, you and your Android smartphone will both be reasonably safe.