On the other note, PCMCIA cards are huge. CF cards aren't exactly small, and because of the "Throw-Away" society we live in, people don't make CF cards for new devices often.
So if we want to use wireless, we have to incorporate the latest version we have. The camera on this is not designed for taking high res photos, it's for quick low-quality snapshots for use as a background picture, and for video conferencing. I am not about to carry a USB webcam in my pocket for when I want to call my Dad from university. That's what the camera in my Uni, and hopefully my PPZ are for.
On terms of OS, the PPZ's central purpose is to be an open source replacement for the HTC Universal, and the CXXXX Zaurus. So the softwre is open source, and you can stick whatever you like on it. Linux, OpenBSD, and if you felt like porting them, ReactOS, AROS, FreeBSD, even an old open-sourced version of Windows (I know at least one of the old codebases has been released.)
I don't see therefore that the OS is going out of date. basically, we're avoiding the Convergent Technology Trap by only implementing the bare minimum of things, not to replace other devices completely, but for different "Phone" functions. We chose the iMX31 to get decent support, 3D for Gaming, MPEG decoding for Video and music playback, incredible I/O support, and a dedicated Floating Point Unit. But it's still a PDA chip, and as such, shouldn't be a big drain on power. It's a pretty ruddy versatile chip.
Finally your point on Memory, not only do we have 4 times the standard (256mb) at current count, it's twice as fast. Overkill? Probably. A small effect on battery life because of it? Most likely. A ridiculous preformance boost and reduced likelyhood of the system being out of date for a long time? Guaranteed.
As you said, it's a Coding, Gaming, Media playing machine. And just by abandoning Intel and their new buddy XSCALE owners, we can get a serious machine without a BIG fall in battery life. And because we're building with new batteries, we can use what we like to get maximum mAh in the thing. Which is why we're all looking at Digital Camcorder batteries, because they're designed for big mAh, small cm2.
Rant over.