The good people of One Laptop Per Child haven't been resting easy, and are working on releasing an upgraded model of their XO netbook by late August.
While it's not the touchy-feely XO2 we're all waiting for, the OLPC XO 1.5 is a nice upgrade that is designed to make the overall unit more powerful without draining any more battery.

As Jon and Ed from OLPC optimistically put it: Overall, the target is to match the Gen 1 XO-1 in power consumption while making aggressive suspend [oh and everything else too] easier, and in price... It is likely that both goals can be met.

Upgrades include a bump to 1GB RAM and either 4GB or 8GB (upgrade installed at manufacture) NAND Flash storage. The XO 1.5 will also be moving over to a VIA chipset, the VIA C7M, with clock speeds between 400MHz and 1GHz. This new chip promises HD decoding, 3D graphics, and stereo sound among other things. While a large number of prototypes won't be available until August, some early versions of the hardware should be available for driver development as early as the end of May.

Source: http://www.laptopical.com/olpc-xo-gets-a-bump-with-gen-1.5-24488.html