Because I couldn’t find any info on how to use sub-projects (that is sub folders in a project) as libraries within the ADT in Eclipse, here’s a short how-to:
Use submodules as you normally would, e.g. when cloning a project with sub-projects use this:
git submodule init
git submodule update
Then in Eclipse you can create a new Android project with the wizard from the existing source (and pointing the location to the sub directory).
When you reference the sub-project as a library for the main project, it will magically point to the correct directory inside the main project.
The yaxim Jabber client for Android for example uses this to depend on the MemorizingTrustManager (see the screenshot).