More info regarding this laptop can be found at : http://laptop.media.mit.edu/.
My views: In my opinion, rather than simply writing off the $100 laptop the indian govt could have atleast introduced these to those children who dont sit under trees and do have a proper school where they could have used the laptop as a device to learn from better (and more funnier than their books). Many children in india leave education only because they never found studies interesting enough. I have seen child labors in my own state Bihar, India, where they chose to opt out of school just because they did not find it fun and so spent time away from school bunking classes. Providing those children with an interesting electronic device and showing them how to use it is all that will be needed to get them started using it. Also even if 10% of children pick up the basics, the knowledge will spread among the remaining like fire in the jungle (you know how children are! and laptop is not only ebooks - its games too :)) - and over time the mission (to spread literacy) will be accomplished.
Also programmers like Linus Torvalds have attested to the fact that he has been able to accomplish most in the computer science arena mainly as he started pretty early (Read the answer of Linus for how he learnt to program). I quote:
"I didn’t learn programming in school, but mostly on my own reading books and just doing it (initially on a Commodore VIC-20, later on a Sinclair QL)." - Linus Torvalds.
And to answer the question on what he (Linus) thinks makes some programmers 10 or 100 times more productive than others:
"I really have no idea. I think some people are just better able to concentrate on the things that matter, and I think a lot of it is just doing it. Most of the really good programmers I know started doing it fairly young." - Linus Torvalds.
So the point i am driving at is let them (the children) have an opportunity to get started with technology early in their lives. And thus, they can themselves be able to shape their lives based on what interests them most. Empower them by just providing them the right tools to learn the fun way. Note, laptops are not as dry as books and even a child who gets really interested in playing games may end up writing one some day just because he got too interested in knowing how the game thing works (you know children how they are!).
If Indian govt can invest in crores to buy more arms to make the nation feel safe, then its high time they start thinking on how to build the nation by spreading means of education among the populace. Why we want literacy afterall! Its because it enables the citizens to be educated enough to act responsibly.
Still many children born to poor families living in towns dont get to use a computer just because their parents cannot afford to buy one for them. If a laptop is cheaply available then atleast (like a mobile phone or television became a household item for even a rickshaw puller) parents can provide their children with the device to learn from the fun way. And you never know how many get sincerely attached to their devices and start bringing to our world more innovation. I sincerely feel that we must let this device be introduced in developing countries with rising population as this can serve as a medium to get free ebooks and in general to get the children interested earlier in electronics and reading.