Quite an interesting device. I might even want one myself, but only if it gets support for YouTube. I didn't see any mention of how much storage it comes with, but I would hope that it at least comes with a couple of USB ports and an SD card slot -- and isn't hampered by the limitations of built-in storage like the G1. I would also hope that it would support PDF (which might make it a reasonable e-book reader).
The demo showed the virtual keyboard, which I thought was a bit of a waste, especially since it was not clear that the display was touch-sensitive.
As for the hope that a company like WalMart would pick this up and sell it for $100 or less, I don't think that will happen. Most of the folks that shop at WalMart are not techies, and in its present form, this is a netbook only a techie would put up with. It's certainly not the iPad-killer, even though I personally would not buy an iPad (or Kindle, or any other platform that allows the vendor to "repossess" content).