Following on from the OLPC, the indian government has released a subsidised $35 tablet to distribute around their schools. Subsidised maybe, but not by much - $60 is its retail price, amazingly cheap for any touch screen tablet. Android OS, resistive 7" screen, Wifi, GPRS modem, 256GB ram, 2GB internal storage (expandable). Pretty good!
India is already a well known source of cheap app development, imagine what it will be like in 10-15 years time with kids growing up with this technology.