The OLPC saga continues, and things are looking a little grim according to this BBC article. The likes of perennial bad guys Microsoft and Intel seem to have taken off the gloves and entered the ring, and have already fired off a few low blows. They've also influenced the referees it seems, since demand for the thing isn't quite what was expected. It's not all doom and gloom however, and there is still optimism for the project.
An interesting related story tells of the pros and cons of the laptop in the wild, as evinced by its use in a 'test school' in Nigeria.