Multiple Touch Gestures in Android? Does Android allow for multitouch input?

I have a Samsung Galaxy Y phone with Android 2.3. On the Samsung Homescreen, when I rotate two fingers simultaneously in a clockwise direction, I get the option to add/remover spaces from the home screen.

Because of this, I assume it must be possible, but I have never come across any app for Android that makes use of it. Several iPhone apps make use of them. Why is it? What is the state of multitouch in Android?
There are many apps in play store which support multiple touch gestures.
For example you can zoom in or out in many video players like (mx player, bsplayer)
E-book readers like mantano reader uses two finger touch to scroll pages...
GestureControl app is totally based on multi-touch and gestures...