This link says that it is indeed possible to write code in Python and use it for app development in android platform. I would like to know what the catch is when using Python and not Java. Is there any compromise being made in speed of execution or size?
From the link you posted:
Scripts can be run interactively in a terminal, in the background, or via Locale.
This already is a disadvantage, as you can't release your Apps to Android Market easily. This can however ostensibly be avoided by the build script of Pygame Subset for Android, but I am not sure about this. The Python interpreter will however need to be installed on the device, which will bloat the App's size by quite a bit.
The speed of execution of Python on an Android device of course is slower than Java, as Python doesn't magically accelerate just because it runs on a phone. The difference isn't that great in most situations, though.