Okay, so lets review with some new information. First, two-way communication between ViewModel and Model and View.
Obviously, one can use an even bus such as Otto to wire up that other mode of communication from your UI widgets to ViewModel. And by making the event objects pojos with no android calls in them that means they are testable.
SO the fly-in-the-soup is how much is put into the generated classes. Right now, the doc reads setters and getters. Thus we can test for values but a small part of the logic you put into the xml files to enable data binding obviously is not in the getters and setters.
I am just going to have to work some examples to wrap my head around this..