According to this interview on Electronics Weekly the devices not only are real, 50 prototypes have been delivered, and are already running Debian. They will come in two versions to start. One will be a 128MB machine with no network and only one USB port and cost @$25. The second will have 256MB of RAM, a network port and 2 USB ports and cost @$35. Both will have a 700MHZ processor, Stereo Sound Output through a standard Headphone jack, HDMI and the old composite connection for hooking up to your TV. All of this will end up on a package the size of a credit card. The goal for the developers is to inspire the next generation to want to tinker with PC’s like the current generation did.