The Openmoko isn't ready for prime time at all. It reminds me of using Linux in the nineties--lots of configuring stuff by hand--but at least back then when you got it working it was stable. I'm still getting lots of slowdowns and crashes. The GSM reception drops out every few minutes... sometimes it's better, sometimes it's worse depending on the distro you're using and what updates you've applied. Even Qtextended (formerly Qtopia) crashes a lot. I don't think the GSM reception thing is hardware related because I've had it running perfectly before. There are also basic problems like how it doesn't always wake out of suspend when you have a call or a text message, but I think that's been mostly resolved.
Something I discovered the other day was that even if you leave the phone plugged into the wall charger all night you might wake up with a dead battery. Once the battery is charged it starts draining. The best part is that if the battery is completely drained you can't power up the device even when it's plugged in. You actually have to get a new battery if you ever let it completely drain... or have the tools and knowledge to resurrect a dead battery on your own. Thankfully my brother also has a Freerunner so I managed to power on with his battery then swap mine in after it booted.
Watching from the outside it seems like the Openmoko team really lacks leadership. They started working on a GTK+ based system and released it as 2007.2... that one was close to being functional but the GSM parts were unstable. So they started working on ASU (now called 2008.8 or .9) which is a mish-mash of Qtopia ported to X11, Enlightenment and PyGTK. That's what they're focused on right now. But they've also got the project called FreeSmartphone.org, so they have a third distro called FSO. FSO has its own phone stack instead of using the one from Qtopia. Eventually they'll bring the FSO phone stack to 2008.8.
They also just announced that they're going to stop developing the applications they've been working on and focus on stability and reliability of the basic phone functions and suspend/resume. That's the best news I've heard out of the team yet.
Of course there are also community distros. Rasterman releases some of his own experimental builds and so do a few others. There's a distro called Fat and Dirty Openmoko (FDOM) that is just 2008.8 with a bunch of apps installed and some fixes applied. And you can run Debian on it too, but I haven't tried that yet.
As far as applications go, I imagine you could port anything that runs on your Linux desktop to the phone as long as it's not to resource intensive. The phone has X11 and it's even got 3d acceleration.
Right now on my phone the address book, dialer, calendar and sms/email are from Qtopia. I have Pidgin, Pythm (an mplayer front end, untested), Navit and TangoGPS for GPS, Linphone for VoIP (haven't really used it yet). For browsing I've got Minimo 0.2 (it kinda sucks) and Midori (webkit based, just installed it today). And I have Duke Nukem 3d which is controlled by tilting the phone. Sounds like fun, but it's actually a little tiresome. I was thinking of installing Abiword but I don't know how much word processing I'll be doing with the touch screen keyboard.
So I guess to wrap things up you shouldn't get this phone unless you've got money to burn for a cool pocket linux gadget. I still use my cheap Nokia flip phone most days. But the Openmoko is fun to play with and it comes with a really nifty stylus/pen/laser pointer/flash light. Really.
I'll probably try Android on it, but only after someone else releases kernel and rootfs images so I don't have to do much work. I'm still much more interested in the Openmoko platform than in Android because the Openmoko is much closer to a familiar GNU/Linux system than Android ever will be.
One thing that would be nice though is if the market gets flooded with smart phones that boot Linux kernels with all devices working. Because I was thinking that down the line I might buy an Android phone so I can put Debian or an Openmoko derivative on it.