Here's OLPC's press release regarding the matter (from http://wiki.laptop.org/go/Intel#INTEL_RESIGNS_FROM_OLPC):
January, 4 2008 - We at OLPC have been disappointed that Intel did not deliver on any of the promises they made when they joined OLPC; while we were hopeful for a positive, collaborative relationship, it never materialized.
Intel came in late to the OLPC association: they joined an already strong and thriving OLPC Board of Directors made up of premier technology partners; these partners have been crucial in helping us fulfill our mission of getting laptops into the hands of children in the developing world. We have always embraced and welcomed other low-cost laptop providers to join us in this mission. But since joining the OLPC Board of Directors in July, Intel has violated its written agreement with OLPC on numerous occasions. Intel continued to disparage the XO laptop in nations that had already decided to partner with OLPC (Uruguay and Peru), with countries that were in the midst of choosing a laptop solution (Brazil and Nigeria), and other countries contemplating a laptop program (Mongolia).
Intel was unwilling to work cooperatively with OLPC on software development. Over the entire six months it was a member of the association, Intel contributed nothing of value to OLPC: Intel never contributed in any way to our engineering efforts and failed to provide even a single line of code to the XO software efforts – even though Intel marketed its products as being able to run the XO software. The best Intel could offer in regards to an "Intel inside" XO laptop was one that would be more expensive and consume more power – exactly the opposite direction of OLPC's stated mandate and vision.
Despite OLPC's best efforts to work things out with Intel and several warnings that their behavior was untenable, it is clear that Intel's heart has never been in working collaboratively as a part of OLPC. This is well illustrated by the way in which our separation was announced singlehandedly by Intel; Intel issued a statement to the press behind our backs while simultaneously asking us to work on a joint statement with them. Actions do speak louder than words in this case. As we said in the past, we view the children as a mission; Intel views them as a market.
The benefit to the departure of Intel from the OLPC board is a renewed clarity in purpose and the marketplace; we will continue to focus on our mission of providing every child with an opportunity for learning.