The AIR runtime stores the native AS classes which an Android application can reference. It is invoked by your application when it launches. It only needs to be installed on the device once and is shared by all AIR applications.
The AIR runtime comes installed on some new Android devices, but not all. As with all applications installed on an Android device, the AIR runtime is packaged as an APK file. If you do not have Adobe AIR yet, search for it in the Android Market application on your device, download it, and install it.
Future AIR updates will also be deployed via the Android Market to adapt to Android evolution. For instance, the AIR 2.6 runtime became available in February 2011 to run on Android 2.2 (Froyo), Android 2.3 (Gingerbread), and Android 3.0 (Honeycomb). It provides new features and performance improvements.
Using AIR on Android creates an additional layer on top of the platform, and communicates with it. You do not need to know the inner workings of this process, but being familiar with the Android system may be helpful.