I just read (BBC News) that the program is getting started again. I sure hope they do better this time.
It seems they will be starting the program again in the August/September time frame. In the same article is a brief intro to the XO2, which is supposed to be a dual screened e-book device where one screen will be a keyboard and will sell for $75.
This sounds like there could be three different XO computers floating around at once; the original XO, the Windows/Linux version, and the new keyboardless version.