The concept of Ecology of Physically Embedded Intelligent Systems, or PEIS-Ecology, combines insights from the fields of ubiquitous robotics and ambient intelligence to provide a new solution to building intelligent robots in the service of people. While this concept provides great potential, it also presents a number of new scientific challenges. In this paper we introduce this concept, discuss its potential and its challenges, and present our current steps toward its realization. We also point to experimental results that show the viability of this concept. The discussion in this paper is also relevant to any type of ubiquitous robot or network robotic system.