George Ou has an interesting piece on social reactions to OLPC — you are not allowed to evaluate it because it is not a right thing to criticize such social endeavors. See his article here.
I have several reasons to believe that cost is not a reason that will make or break such a device really useful gor the ‘supposed’ users. I just think that functionality of this computer is more western than common people in developing and emerging world are ready to use. When PCs came, new functionality emerged and that made PC a useful computer for masses in developed world. The functionality (in computers or mobile phones) that will make them PC for the emerging world will similarly emerge. To me OLPC is much farther away from that than iPhone is.