Things you need to consider while buying an Android phone:

Before you buy an ANDROID, read it !!

1.      Internal user memory

On an Android phone (Unless its rooted and a custom ROM is installed) the apps get installed on the internal memory and only on Android 2.2 and above support moving the app to the SD external memory card. 
     Moreover only those apps can be moved which support being moved i.e. it was made such that it would support being moved to the SD card.
     Another issue is that even if you are able to move the app 
     to SD card, it would use a bit of system memory on internal memory. 
     So your internal memory is always compromised.

If the app supports a widget and you move the app to SD card, the widget stops working on an Android. So when you buy an Android ensure:

1.1.     Space available for user should be at least 512mb

1.2.     Ensure that the Android is 2.2 or above

Go to setting > Storage and SD and check Internal Memory

2.      Touch screen
Almost all Android phones are Touch. So you should ensure that the touch of the phone is nice.

2.1.     Ensure that the glass is scratch resistant or Gorilla Glass.

MultiTouch Visualizer 

2.2.     Touch has to be capacitive.

2.3.     Should read more than 3 fingers at a time.

To test number of finger it reads, install “MultiTouch Visualizer” from the market and test it. Scan the QR code to download MultiTouch Visualizer
Any device which reads less than three should be avoided.

2.4.     Shouldn’t be so large- such that while the phone is in your right hand and if u use your right thumb to touch the left top point of your screen, your thumb’s bottom shouldn’t touch the screen right bottom. Multitouch properties start functioning if it happens and produces unexpected results on the screen. 

2.5.     Phone’s edges should be higher than phone’s screen. This would protect the screen from cracking in case of a flat fall.

3.      Battery
Android phones tend to consume a lot of battery. So better the battery, better would be the phone.

So ensure that the battery is of 1350mAh or more

4.     Processor

Any Android phone you buy, try to get a processor above 600 MHz. A processor with speed of 1 Ghz would make your work smooth. Now we even have dual core processors for Android devices.

Yes there are overclocking methods in Androids, but a basic user should avoid doing so. 

5.     SD card

Rarely would you find a retailer that sells External memory cards(SD cards) not only categorized under capacity but also its speed. The speed of a memory card is classified under various classes as – class2, class 4, class 6, class 8 and class 10. Higher the class, better would be the speed.
Check which one you get with the phone or do consider while upgrading.

6.      GPS accuracy
      GPS is an essential feature of any Android device. GPS is quite a handy tool and of much use. few usage of GPS include: Navigation, Geo tagging, Geo Marking, Track movement, location sharing etc etc. So better the accuracy, better would you be able to use the GPS aided functions. 
     I have tested HTC Desire, Hero, Legend, and Desire s. All have shown a maximum accuracy of 2 meters. So when you buy, make sure you get a phone with a nice GPS accuracy.