What is the Ledger Unplugged?
The unplugged is a NFC hardware wallet working with your Android phone. Private keys (HD wallet seed) are secured in a smartcard which also manage Bitcoin transactions signature and verification.
What are the differences with the Nano?
As it is the same firmware implementation, the features are the same. However there is only a NFC interface, and you can use it for now only with third party apps such as Mycelium or Greenbits. It is not possible to use the Ledger Chrome application.
The major benefit of the Unplugged is the mobile use case with secure signature of a transaction with just a tap.
Is it PIN protected?
Like the Nano, you have a 4 digit PIN to unlock the device. You also get a security card acting as a second factor (not needed when signing multig transactions).
Can I pay in stores with it?
Not directly. Right now you need to use a compagnion software wallet (such as Mycelium) to initiate your transaction. In the future, single tap transactions on a payment terminal will be supported.
What if I lose it?
Like the Nano, you get a recovery sheet where you will write down a backup of your seed (24 words). This backup gives you access to your bitcoins anytime, without the seed of a Ledger device.
Is the Unplugged firmware open source?
How do I know if my Android device is compatible?
It must support Near Field Communication (NFC). If you are not sure, one simple way would be to install NFC Tag Info, tap a contactless card and see what happens - if you tap an old card and get an error saying the Mifare Classic is not supported, it's ok though.