Google made the announcement on its developer blog.
Here's how Google described the change, but in reality, it's pretty much the same as how 2x mode works on the iPad:
Beginning with the upcoming release, any app that does not target Android 3.0 (set either android:minSdkVersion or android:targetSdkVersion to “11” or higher) or does not explicitly set android:xlargeScreens="true" in theAs we noted earlier, most Android apps scale just fine on Honeycomb tablets. However, there are some that show up in tiny, smartphone-sized windows on screens. The new change will appear in the "next release" of Honeycomb, which is probably going to be 3.2.
element will include a button in the system bar that, when touched, allows users to select between two viewing modes on large-screen devices.
“Stretch to fill screen” is normal layout resizing (using your app’s alternative resources for size and density) and “Zoom to fill screen” is the new screen compatibility mode.
When the user enables this new screen compatibility mode, the system no longer resizes your layout to fit the screen. Instead, it runs your app in an emulated normal/mdpi screen (approximately 320dp x 480dp) and scales that up to fill the screen---imagine viewing your app at the size of a phone screen then zooming in about 200%. The effect is that everything is bigger, but also more pixelated, because the system does not resize your layout or use your alternative resources for the current device (the system uses all resources for a normal/mdpi device).
That, it would seem to us, would be at least as important as this new zoom feature.