A short video of the 1st OLPC system. This prototype uses a 1GB flash drive to store the OS (Fedora) and a few apps. The USB port will allow external devises like CD/DVD drives. The OLPC initiative has also received its first order (from Nigeria) for 1 million of the systems (vunet.com) so it looks like things are moving quickly with this promising initiative. I also read a post re India's interest in the system and how some people in the Indian government are questioning the wisdom of that country signing on as well. The message cited concerns like it running Linux (a bonus I would say) and having to replace the motherboard when there is a problem. When we are talking about a $100 (and eventually sub-$100) system, I don't see how the 2nd one is an issue and the the lack of Windows is definitely a positive.
Scraped from Silicon Valley Sleuth