I see that the Heap Size is automatically increased as the app needs it, up to whatever the phone\'s Max Heap Size is. I also see that the Max Heap Size is different depend
Early devices had a per-app cap of 16MB. Later devices increased that to 24MB. Future devices will likely have even more available.
The value is a reflection of the physical memory available on the device and the properties of the display device (because a larger screen capable of displaying more colors will usually require larger bitmaps).
Edit: Additional musings...
I read an article not too long ago that pointed out that garbage-collecting allocators are essentially modeling a machine with infinite memory. You can allocate as much as you want and it'll take care of the details. Android mostly works this way; you keep hard references to the stuff you need, soft/weak references to stuff you might not, and discard references to the stuff you'll never need again. The GC sorts it all out.
In your particular case, you'd use soft references to keep around the things that you don't need to have in memory, but would like to keep if there's enough room.
This starts to fall apart with bitmaps, largely because of some early design decisions that resulted in the "external allocation" mechanism. Further, the soft reference mechanism needs some tuning -- the initial version tended to either keep everything or discard everything.
The Dalvik heap is under active development (see e.g. the notes on Android 2.3 "Gingerbread", which introduces a concurrent GC), so hopefully these issues will be addressed in a future release.
Edit: Update...
The "external allocation" mechanism went away in 4.0 (Ice Cream Sandwich). The pixel data for Bitmaps is now stored on the Dalvik heap, avoiding the earlier annoyances.
Recent devices (e.g. the Nexus 4) cap the heap size at 96MB or more.
A general sense of the app's memory limits can be obtained as the "memory class", from ActivityManager.getMemoryClass(). A more specific value can be had from the java.lang.Runtime function maxMemory().