A very well reasoned and articulated point Remote User. And I think that many computer theorists have speculated and have pushed for exactly the direction you are suggesting (network&terminal orinted approach vs isolated workstation). For specific tasks though, I guess the reality still necessitates a computer... in my case, graphics apps. Not to mention, its nice to have a machine that can handle may varying tasks. But I guess all that stuff in the end can also be provided via the network & terminal setup, theoretically, and I'm sure moves will be made in that direction eventually.

To confirm everyone's suspicion (though not Bill Gates) Steve Jobs did offer OS X for free as the OS for the $100 laptop, in a move I'm sure was motived by three parts altruism and seven parts increasing marketshare and profits. The project organizers politely rejected the offer, since they were looking for an open source OS. As an OS X user, I cannot but sing high praises of it, but it was the right move on the part of the project organizers to go open-source.

What seems to irk Microsoft beyond the long term problems outlined by Remote User is that in the short term, the thing uses Linux. Add China and Brazil, where governments have officially adopted Linux and its develpment, to most of the developing world where this laptop is targetted, and you have a mounting problem for the future of Microsoft market domination.

As a side note, I should also add that around December, Intel chairman Craig Barret also chided the $100 laptop as a "cheap gadget". This may have to do with AMD's participation in the project, but now that the UMPC has been revealed, their comments a few months back makes all the more sense.

I personally think the $100 laptop has excellent specs. Aside from the lack of hard disk (which is not needed for what this is intended), its specs roughly match that of the first generation iBooks from a few years ago.