Hands-on video:
In my opinions, nothing stellar, and from the looks of it, the thing uses AMD Geode, which... isn't exactly what you'd want to use to run emulators of systems higher than the SNES. Maybe you can try Connectix VGS for acceptable PSX emulation, but I don't suppose it can handle more than that.
12-hour battery life is also... a bit of a problem for a "phone". Not to mention the size isn't very pocket-friendly so you have to lug the thing around somehow. Keyboard seems too small, and won't be of much help for anything at all except SMS, which is kind of silly because it's a device with Windows XP. Of course watching youtube is also out of the question. That's how slow that CPU is.
Nice concept, but I don't think that'll work out too well.
Meanwhile, MSI made an excellent netbook that ran for up to 24 hours on battery. Look for MSI U115 for more information. Now couple that with 3G network and Skype and you might just have something closer to a phone (or at least more useful) than this device.
Price might also be a problem, too. In this perspective, I'm suspecting.. that either Sony Satio (Idou) or iPhone 3GS or Nokia N97 would be a better contender for a phone.
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cChip interpreter WIP - current status: Release Candidate
LRx Filter RC - current performance rating: 9/10