beta version of Skyfire 2.0 for Android that was released today, and we'll cut to the chase: this is easily the best browser we've used on the platform. Clearly we'll need to spend more time with it to make sure it can handle all the typical sites you'd want to visit while you're on the road -- but loading the desktop version of Engadget is always a great barometer for this sort of thing, and this browser rocked it. Rendering is about as reasonably fast as you can expect it to be (on our Snapdragon-powered Nexus One, anyhow), and everything we saw displayed spot-on perfect (save for embedded Flash, of course), but if you're in a situation where you don't need to see the full page or it looks screwy, you can toggle it to send an Android user agent right from the app's toolbar below the URL field. It works just about as well as Steel and the built-in browser on a G1 we tested, and Flash videos work just fine there as well.
The browser touts compatibility with Flash videos, too, so we headed over to YouTube to try our hand at it; it immediately detected the presence of a video and popped up the so-called "SkyBar" at the bottom of the screen, where you can press the Video button to load the video in a new window. It doesn't work embedded in the page, but considering how small your phone's screen is, that's really for the best -- you get the full-screen experience, and in our testing, it looked fantastic. One downside is that you don't seem to be able to scrub videos while they're playing, but maybe this is something these guys can get patched up for the final release. Follow the break for our full video!
Update: One annoyance we've noticed is that pinch-to-zoom works in "steps" -- it's not smooth, which makes it pretty weird to use, but remember that Opera Mini doesn't support it at all.