Well it's in the early development stages yeah but there are already proto types out there and functional ones at that. Otherwise no one will believe viability of such a project.
But, there are certain bugs that exist and certain things that need to be adjusted and such. One example I remember being mentioned is the battery life. In the first version of the laptops out there, due to a bug it couldn't be charged fully sometimes so giving only like 2 hrs on full battery sometimes.
This has been corrected now.
In that demo the battery lasted for about 2.5 hrs. that's quite nice considering the fact that wifi was used extensively, also ssh session was run from the laptop to another laptop. The X session from the other laptop was forwarded to the OLPC laptop, and firefox and gnome-calculator was run. We also saw youtube videos on the OLPC laptop from the forwarded firefox cos the inbuilt one has gnash installed which can't
play videos.
Another thing I remember is mention that the lot of parts of the OS are designed in python.
Well if it will work on not depends on the governments,
AFAIK these will be sold to governments which in turn will subsidise and sell it to the children. Correct me if I am wrong here. And yeah also the marketing effort, whoever can ignore it.