Here is the most substantial [hardwarezone.com] list I've seen of specs on it. I agree with you that calling it a notebook is a stretch. At the same time, I haven't seen anything with that kind of capability at this price point, smaller or larger. I think I could easily go for the $199 model. They don't specifically mention usb in the list of features - but I would think that it would be necessary to augment the storage.

http://openmoko.org/ [openmoko.org] is the site for the software running on that FIC phone. It's quite a nifty project. The wiki also has pictures of the insides of the phone if you are into that sort of thing. :)

But ... those girls don't wear cases. You can see their bare circuits! -- Bender

Here are some specs on the phone:

Physical Dimensions
  * 120.7 x 62 x 18.5 mm (4.75 x 2.44 x 0.728 inch)
  * 184 +/- 5 g (6.5 ounces)

Hardware
  * 2.8" VGA screen
  * 266 MHz Samsung Processor
  * 128MB SDRAM
  * 64MB NAND FLASH ROM
  * GSM/GPRS
  * Bluetooth
  * GPS

http://wiki.openmoko.org/wiki/Category:Neo1973_Har dware [openmoko.org]

And here's the newest news. The second generation will have the following additional specs.
-400MHz Processor
-a 2D/3D-Graphics Accelerator
-256MByte of Flash Memory
-WiFi
-updated battery: 1700mAh
2 Accelerometers.

I believe the Neo also has bluetooth.
And since you brought up the iPhone's price, the Neo is going to be $350 and will be unlocked, with no plan.