I've update to the latest SDK(4.0.x), tools(r16) and plugin(16.0.1) for Eclipse. I notice that now nearly all my projects in Eclipse have the library mentioned in this question's title showing as a referenced library in the Libraries tab of the Java build path. This is relatively new, though I'm not sure in which upgrade of the SDK it appeared.
It's not causing any problems but I'd quite like to know what its purpose is?
Interestingly it does not appear in projects which I also build using Ant from the command line. In these projects I send the Ant built binaries to a folder outside the Eclipse workspace. These projects naturally have a build.xml, an ant.properties and a proguard.cfg in the project root. This I suspect has something to do with why the com.android... library isn't in the build path. These projects build perfectly OK when built under Eclipse.
None of my projects are library projects.
Update: If I delete it from the Java build path, it appears to have no ill effects, in so far as the app still builds (even under Eclipse) and runs OK.
If you have any "Android Libraries" set in the Android section of the project then these are for linking in those libraries (the jars that the plugin will build)
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