Photo: top: Still from the  Android One launch  promo for India on YouTube .
Middle: From right to left Google executives -- India Managing Director  Rajan Anandan,  Senior Vice President of Android, Chrome & Apps Sundar Pichai, VP of Product Management Caesar Sen Gupta and Director, Marketing Tom Oliveri at the Delhi launch of Android One phones, September 15 2014. 
Bottom: Current generation Android One Phones are fuelled by a processor from MediaTek.

September 16 2014:
Android One Q&A ( source: Google/Android One resources):
What is Android One?
Android One is a new family of Android devices, designed in collaboration with several manufacturers. All Android One devices run the latest version of Android, get updates from Google, and come with a hardware package tuned for Android.
Is Android One a new version of Android OS?
No. Android One is a family of devices running Android. The current version of the Android OS is Android KitKat.
Why should I buy an Android One device?
An Android One device will always run the latest version of Android on a high-quality hardware package. You’ll enjoy a smooth, fast, lag-free experience and access to the latest technology, features and apps. All at a really affordable price.
How much do Android One devices cost?
The current line of devices starts at Rs. 6,399.
Who makes Android One phones?
We’ve currently partnered with Micromax, Spice and Karbonn to produce Android One devices.
How do I update my Android One device?
Updates happen automatically over the air (OTA), through your 3G or WiFi connection.
What apps come with my Android One device?
Your Android One device is already loaded up with the latest version of Google Apps like Gmail, Calendar, YouTube, Maps, Google Now, Google Search and Hangouts. You can also download over a million apps through the Google Play Store.
More info here