So what exactly is a 'live wallpaper', well simply put instead of your background being a boring static picture, it's now a program. And being a program that can harness the power of the Android system it can do some really great things, but before we get to those let's look at some of the more traditional LWP's (Live Wallpapers).
Blue Skies Livewallpaper:
Dreams of flying?
Blue Skies LWP presents a beautiful scene of flying through the clouds, don't be fooled by the appearance this is not a resource intensive video that's going to slow your phone down and eat your battery. Jus
t sit back and enjoy the view.
Nexus Revamped:
Most Android devices will come with a selection of built in LWP's, and one of the most popular of those is the 'nexus' wallpaper. Who wouldn't love that little 'Tron-esque' scene, but who want's it to be better?
That's where Nexus Revamped steps in. Offering the ability to change everything from the background, to the color and amount of 'particles' racing through the screen it's truly a fantastic upgrade to an already great LWP.
Striker LWP.
Lose yourself for hours watching
some tiny little players kick around a ball.
Taking it to the next level:
An important thing to remember about LWP's is that it's not just a picture, or a video, it's a full fledged program. They have the ability to do.. well anything really. Heres a couple that really take advantage of that and not only change the 'wallpaper', but make your phone just a little bit better as well.
Notification Bubbles.
This is more than just cute little bubbles floating across your screen, when you recieve a new message from sms, Gmail, Twitter, or even Facebook, a new bubble will spawn showing you the contact's picture, as well as a brief summary of the message. Simply pop the bubble to launch the associated program. You can also pick the static wallpaper image to use as your background, whether it's unicorns, rainbows or fluffy kittens.
Multi-Picture Live Wallpaper
Finally today I'll share one of my favorites, multipicture livewallpaper allows you to change the image each time you swipe your homescreen. Choose an entire folder, a selected album, or even your Picasa folder, with the option to select between several cool transition animations.
Conclusion:
There are litterally hundreds and hundreds of different live wallpapers on the Android market. We've covered just a tiny percentage of the different things that they can do. So go ahead, change that boring old picture into something fantastic, that moves and is the way that you want it to be. With a quick search on the market you can make your Android device... better 
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