I own the PengPod 700 and I contributed to this project for the 1040 for an upgrade. Here are some comments I have:
First, the PengPod 700 is great for what I need it for - which is mainly a mobile tablet that boots Linux for taking notes in Vim. I would do the same with a Rapsberry Pi, some USB display, and a battery, but it is all there in one package with the PengPod 700. It fits just fine in a case with a mobile keyboard. Some downsides to the original design: low processor speed + RAM - starting Firefox takes some time, but it still works. I feel like USB in Linux without autologin is a single point of failure - and it has been reported that the connector does suffer. It also doesn't have access to the backlight PWM/GPIO out of the box - so no brightness control, which directly affects battery life, which isn't that great. For what I use it for (taking notes at meetings or on the go), the issues aren't too bad. At $100ish for a Linux tablet, you can't go wrong if you set your expectations right.
Now, I want the 1040 because the specs are amazing for that pricepoint, especially with Linux. I would up my usage of it to playing some light games, spreadsheet, general web browsing - it would really be something that I wouldn't feel bad using from the couch or pulling out at a conference. I still would prefer multiple USB ports, but most tablets don't even have one.
I really wanted an Ubuntu Edge, but didn't really need to replace my current smartphone and honestly I could see myself using the 1040 a lot more. I probably still won't be doing heavy development on it or running WINE (both due to ARM), but I can't really find much that is cheaper from a mobile perspective with the full package running Linux.