Our One Laptop Per Child (OLPC) device arrived in the mail today. We participated in the Give One Get One campaign (we bought two; one was sent to us and the other was donated to a developing area of the world somewhere).
After less than an hour with it, I'm pretty amazed at the hardware that's packed into this little guy, especially for the price of <$200. Sure, the processor is a little slow for handling complex Flash-enabled websites, and you won't win any speed races initiating apps, but it has just an amazing mesh Wi-Fi interface (which allows instant sharing amongst other OLPCs of most activities on any one of them), an embedded webcam, and a whole host of pre-installed applications (from a music mixer to drawing to a web browser to a journal/notebook and so on).
I'm not sure it is a better solution for a kid's school laptop if that kid has access to regular electricity and his/her parents can scrape up the cash for an Asus EeePC or cheapie Dell (I just saw one in a flyer for <$370), but as it was designed for children in third-world countries, I think it should be a great fit for any kid 5+ who wants to just explore what computers can do.
Update: I just noticed that our unit does not have the two "keyboard LEDs" shown in the above pic. I wonder why not...they'd be handy for nighttime 'puting.
Neat. I thought about loading Sugar onto the kid's laptop (one of my wife's old laptops) but it didn't seem all that stable.