It is hard for me to see what niche it fills though (I mean from a purely cost per features perspective, not from an embedded userbase perspective), I mean 7" are on ebay for $39 shipped, dual cameras, dual core 1.5ghz, sd card, touchscreen, speakers, usb, battery, etc. etc. The bluetooth ones are a few dollars more, but it makes it almost trivial to add a user interface to a microcontroller (i.e. arduino) project. It seems like there is very little need for anything in-between.
Pi does seem to do a bit better with video, but add in the cost of a display and speakers and a way to get the video to the pi (and integrate it all nicely if you want portable) plus user input devices. The small and cheap aspects are a bit misleading, since it is probably going to be in a stationary setting (not size critical) and needs extra hardware for everything.
I have enough spare computers/laptops if I feel compelled to make a MAME cabinet out of an old monitor
But seriously, even with raspberry foundations stated mission, for cost effective teaching tools for the masses, android tablet is the clear winner. Add a case with built in-keyboard for $15.
Add a $5 hand generator, and you have the whole olpc thing, only more portable and capable.
