Just a quick cell phone update from the airport on the way to Maker Faire. I sent a note to the organizers asking for clarification on reaching underserved populations etc and here's what came back. Short answer is olpc/Sugar is definitely acceptable
The ability to reaching underserved communities is a focus of this prize and part of the judging criteria. How to do that is part of the Call to Action on the part of the applicants. We're looking for innovation in how to reach the underserved, as so many previous attempts have failed. We are not going to limit the specs, devices, etc. OLPC would be great if you're able to make a fun, educational game. If you create something for the iPhone, you should explain how your project can still reach underserved populations (maybe it is also available on another device?).