Open Palmtop Integrated Environment (Opie) generally works OK, although it still has some rough edges. Crappy handwriting recognition system, lack of simple GUI to configure the system (although I'm happy that it has a console), and other stuff. This will not yet attract the average user in its current state, but this may improve in a year or so. I hope this gets sponsored by a commercial entity, similar to Ubuntu being sponsored by Canonical.
My ancient iPAQ is not GSM and GPRS-capable. I hope I can save enough money to buy OpenMoko. Bounty projects on that platform, anyone? =)