Love the idea, but... bottom line... I'm just one of those Linux users that's too cheap. I wish you success; it sounds like a great and well-researched idea. If my making it all the way up to page 55 of this thread is any indication, I will be most envious of those willing to afford it.

Now, to my reason for posting:

Just how "open" do you intend the HW to be? I ask because Arduino published everything OpenSource and Chinese manufactures seem to have taken them up on this, at a fraction of the original price. The market for Arduino can't be that much bigger than a real Linux phone would be. Chinese manufacturers are doing this with a lot of Android devices too, open or not. Some 7" tablets are now sub $50.

Recouping R&D costs these days is no trivial matter and I don't envy your position. Assuming you can find a way to pay the bills, have you considered massaging the design to encourage mass copying?

Considering that what you are planning doesn't require the n900 case, nor keyboard (the n800 ran without one), nor camera for that matter, a open HW design might prove interesting to these manufacturers. Doing a board run, tossing it in whatever cheap case they come up with, and loading some totally free OS on it... They do seem to have a knack for such things.

You are basing this on an existing board (GTA04) that has not been cloned in some 30,000-unit-a-month Chinese monster factory. Why? Is it because the HW is not fully open? Or, is it because there's no decent OS to run on it? If the latter, then that's what you're planning on solving, right?

These factories are selling better-spec'ed Android smartphones for less than 1/10 your projected costs. Why? Because they can. They're not going to idle their plants if orders slow down. They'll do a run of whatever they think they can sell, so long as they don't have to invest any R&D. Your design could very well fit this criteria. Have you considered this, to your benefit or harm?