As far as screen size, a readable 80x25 screen and a regular keyboard so vim works normally is sufficient for on-the-go development. I can get 80x34 tiny, tiny characters on my blackberry now, or half that (or quarter that, depending on how you're counting) with characters that more suit my eyesight. And while developing on it's a non-starter, it's sure come in handy when I've been out and about and needed to fix something (using ssh for access).
A little searching, and it looks like doing it over USB was discussed here:
http://code.google.com/p/android/issues/detail?id=738
And someone appears to have gotten it working with Bluetooth here:
http://groups.google.com/group/android-platform/browse_threa...
Display... a little harder.