LG is not quite the early adopter they should be, but at least they are following Samsung closely. Even though they've promised Microsoft that they will be one of their main partners for Windows Phone 7, they are going to sell many more Android phones, in fact they are predicting that 70% of their smartphone units sold this year will be based on Android.
This is quite an advancement for LG in the Android market. Even though they haven't been one of the companies to promote Android the most on their phones, Android is quickly helping them to catch up in sales with the early adopter companies, and they expect to sell 4.2 million Android phones by the end of the year, which is not a bad number at all.
One thing that LG needs to do, is to show up with some Android phones that can compete head to head with the best phones that HTC, Motorola or Samsung put in the maket. The phones need not only the best specs, but great hardware design as well. You can't just sell brick looking devices anymore.
Another thing that I think LG could use to differentiate from others, is to not use a skin like the others do, but instead use stock Android. LG could become the brand that techies love and evangelize to the mainstream market, if only they would allow for fast updates from Google. This can only happen if they don't skin their phones.
Making it easy for developers to root and make custom ROM's for their phones could also help them to differentiate, even though they might not see it as a good thing right now.