Google Reader for Android just got a nice little update -- mainly that it's now optimized for tablets, too. You now have the basic two-pane system. Folders on the left, stories on the right. And it's all synced with your Google Reader account, just as it should be. Also noted in the app's changelog is that the "Mark Previous as Read" button is now a long-press function. Just FYI.
While Google Reader might not be the prettiest news reader for Honeycomb, but it's definitely one of the more useful ones. Download links are after the break.