Marvell is giving $5.6 Million to OLPC to fund the development of the XO-3 Tablet, with bendable plastic Pixel Qi screen and education-centric customized software, that finalized XO-3 will be ready by 2012 for distribution to schools at a target $75 bill of materials and manufacturing each. OLPC and Marvell will have an early demonstration tablet prototype running Android to show in January at the next CES.
I think that they should definitely go for customizing Android for education. Maybe add Sugar apps support on top of Android OS as a second app platform. I wonder if 7" or 10.1" Pixel Qi will be used, or both. For productivity, I think it should support both touch screen and some cheap $2 USB keyboards/mouse and a kick-stand.