I think it's a great concept and will do better than the N-gage. One interesting thing is that is will already have most (or is it all) of the current Palm compatible games available for it, including emulators. I'm not sure how the emu's run on it, but there's a chance for Mame and some others.
We'll see about the price though, $299 is a lot. Still, I remember paying about that for my TurboExpress handheld so you never know!
Screenshots appear impressive, but I think something to remember, at least from my experience, is that most palm/pocket PC games aren't as polished in terms of gameplay. I remember seeing some impressive titles for the Pocket PC so I picked up a Dell Axim. Well, I grew bored of most of the games after a while. I think the only one I really kept playing was a golf game.
Still, this might have potential. Not as much as the Sony PSP though!