I think the title and description give a false, tabloid-like sensational impression. Neo FreeRunner will continue to sale, and a new revision of it (A7) will even hit the shelves soon.
What has been stalled is the development of the successor of FreeRunner, formerly known as GTA03. It will not ship in 2009.
Anyway, I hope they will stay in business as they are still the only one doing a phone that is really usable as a phone with eg. Debian or whatever. It would be perfectly fine if they now scrapped _all_ their non-hw & non-kernel efforts. They are lousy at handling a software community or coding UI anyway.
As can be guessed, I'm a happy user of FreeRunner as my only daily phone, and it would be sad if one day I would be forced to use a less free phone. And yes, Android dev phone is quite far from Openmoko in reality... it's not like buying a new computer and installing a distro of your choice on it like it is with Neo.