Assuming you've got the Location then obtain the bearing by doing:
float myBearing = location.getBearing();
To implement the overlay you'll be using ItemizedOverlay and OverlayItem. You'll need to subclass OverlayItem to add the functionality to rotate the Drawable. Something like:
public BitmapDrawable rotateDrawable(float angle)
{
Bitmap arrowBitmap = BitmapFactory.decodeResource(context.getResources(),
R.drawable.map_pin);
// Create blank bitmap of equal size
Bitmap canvasBitmap = arrowBitmap.copy(Bitmap.Config.ARGB_8888, true);
canvasBitmap.eraseColor(0x00000000);
// Create canvas
Canvas canvas = new Canvas(canvasBitmap);
// Create rotation matrix
Matrix rotateMatrix = new Matrix();
rotateMatrix.setRotate(angle, canvas.getWidth()/2, canvas.getHeight()/2);
// Draw bitmap onto canvas using matrix
canvas.drawBitmap(arrowBitmap, rotateMatrix, null);
return new BitmapDrawable(canvasBitmap);
}
Then all that remains to be done is to apply this new Drawable to the OverlayItem. This is done using the setMarker() method.