In the next version of Android — now known as just Android L — notifications are getting a big overhaul, taking over your lockscreen and becoming smarter about what you're doing on your phone at any given time. When the phone is locked but turned on, your lockscreen now becomes the notification pane, giving you a list of useful information on what's pressing on your phone right now.
Swipe down once, and you then get a full list of notifications, where you can then double tap individual notifications to launch the app, or swipe it off to the side to dismiss it. Swipe that notification shade up, and your phone will unlock back to your homescreen. The shade itself takes on a very Google Now-style design, with individual white cards lining up with space between them, and stacking up underneath each other when there are bunches of relevant cards.
There's also a new type of notification called a "heads up notification" — that can pop in from the top of the screen over your current app without disturbing completely what you're doing. The example given in the demo today was a call coming in while you're playing a game — you have the option to accept or reject the call while the game is still full screen, or you can simply swipe the notification away to dismiss it altogether without taking action.