While the One Laptop Per Child initiative is a laudable one, I think the project in its current incarnation is a dead end.
I was lucky enough to get my hands on one of these devices a couple of years ago and the first thing that struck me was that the OS was not made for humans, but for aliens. It took me a long time to make sense of it. There seemed to be a faulty assumption that since its prospective users were unfamiliar with computers they would need a radically different UI. I hadn't given this much thought back when the XO came out, so I thought this might be the right thing to do, but a few years down the line I see it as a boneheaded move.
(It would seem there was even a bit of inappropriate cultural sensitivity built into this misguided design -- perhaps they were afraid of being accused of cultural imperialism?)
In any case I think this did more to underline a divide than to bridge a gap.
The second problem with the device was that it assumes that a laptop is the right form-factor. Admittedly, at the time I was guilty of thinking this myself.
I think the ideal computer of the under-privileged has more in common with what we commonly refer to smart phones: a much smaller device that in addition to being a computer is also a phone. For everyday use a touch-screen should be good enough. Perhaps a bit bigger than a typical iPhone or Android phone screen for cost/readability tradeoff, but judging by my own extended use of such devices for browsing and reading, these are actually well into the realm of the usable.
For extended use I think that a simple external keyboard and an outlet for a screen would make the device more versatile. Since there is a huge installed base of TVs it should be possible to create inexpensive interfaces.
The cost of devices that are powerful enough to serve as a base line computing platform is coming down every quarter. Our obsession with smart phones in the west is bringing the manufacturing costs down rapidly. And while the fast-paced adoption of mobile phones in developing countries is currently somewhat limited to very primitive devices, I think we will see more advanced devices gain wide adoption in these markets in a few years.