Even if you don't include any Java-the-language material, I highly suggest adding some solid foundation on Java-the-platform. Android developers should always understand the rudiments of the jvm, java bytecode, dalvik bytecode, the differences between stack and register based execution, DX and .dex, and the entire toolchain involved in the build process.

As for the application to build, you should extend your shopping list to include some sort of network synchronization capability. Teaching Android development without networking is overlooking an extremely important part of the platform.