This seems to work more like Asus' Padfone, so when the phone is docked, you get ICS on the larger screen, and get to use all Android apps.
http://www.omgubuntu.co.uk/2012/02/ubuntu-for-android-announ...
The fact that they run in a special window suggests that the applications actually run in Android, but that they are composited in/on the Linux desktop.
This seems to work more like Asus' Padfone, so when the phone is docked, you get ICS on the larger screen, and get to use all Android apps.