The logical consequence of the fact that PCs keep getting faster even though a PC from 2005 did everything most people need (word processing, email, web, chat).
Nicholas Negroponte did a great presentation at MIT recently. He said that the OLPC still costs ~170 to manufacture; Inflation of the dollar killed their pricing forecasts.
Bought my nephew (13) the eepc 900 in August, in late September it failed suddenly, they're sending it back under warranty. Hope it works better when it comes back...it's a nice little computer though.
And Microsoft didn't see it coming, apparently.