A company by the name of Pandora is creating a Linux based handheld device targeted for open source gaming. (translation: emulating older consoles).
It looks to be fairly powerful with a 600Mhz processor and an OpenGL ES 2.0 compliant PowerVR graphing accelerator matched to an 800x480 screen.
Unfortunately the device itself doesn't look to the least bit ergonomic and I'm going to guess, somewhat cumbersome to use to play games. However I must admit, I still want one.
The company has been taking pre-orders as of September, 2008 for a price of $330 US. Unfortunately the release date has not yet been set.
More information here: