The new policy says that new and updated apps will be required to submit an accurate rating for their applications. They also state that existing apps will need to be assigned ratings, or they will be labeled as "Mature" content. The four designations are "All," "Pre-teen," "Teen," and "Mature".
While some might view these content ratings as a betrayal of the open OS ideology, they might be a necessary step in Android's evolution. In its youth, Android was primarily appealing to early-adopting adults. Now, as more entry-level devices come to market, and the OS gains wider recognition, there will be a larger population of children using it. If Android wants the support of parents, who make the final purchasing decisions, there need to be some content limitations in place.
They haven't yet announced how they will go about limiting what younger users can download. It might be via a credit card confirmation or password, as Apple requires on their mature content. We highly doubt the screening will be as flimsy as an 'Enter your birthday' field, or an 'Over 18?' check-box.
source: Android Developers Blog via IntoMobile