It's not bizarre at all the the estimated time goes up after a time. It re-estimates the remaining time constantly, depending on the amount of charge in the battery _and_ the current battery drain. The latter changes constantly, because the ARM CPU in the tablet tries to hibernate as often as it can. So if you do something CPU intensive the battery meter may show 1h left, if you later run some different application it could recalculate it to 2h left and so on.
After booting up the battery indicator will naturally show less time left than it'll show just a while later. This is totally normal and as it must be.

My laptop does the same, even though the CPU isn't as extreme as the ARM when it comes to power saving. Hell, even the Audi A4 rental car I had did the same - the meter for remaining distance on a full tank started out with 750km, ten minutes later it dropped to 500km, but some hours of driving later it was up at 1100km left.. just because I was careful with the accelerator. Obviously the amount of fuel left had go down, but that's not what the "remaining distance" meter shows.
And that's not what the battery meter in the N800 shows either. In addition the number of bars may ease up again because a particularly hard drain will drop the voltage level a bit, because of internal resistance in the battery. Check your mobile phone, it'll do the same when you fire it up, particularly when the tiny battery is a bit worn out.