At first glance this looks like OLPC is still not anywhere near ready to produce their XO-3 tablet, which would render today's news more irritating than interesting (hype annoys me sometimes). But a close reading of the press release suggests that OLPC and Neonode had signed a deal to add the zForce touchscreen to the XO-1.75, the existing model laptop. (Not all the blogs covering this story read the press release closely enough.)
Now that is interesting. They're talking about taking the XO-1.75 laptop, which is running on a Marvell designed system board, and turning it into a tablet convertible. (BTW, there's a hidden benefit here for Marvell; they're going to get all this design experience with Neonode's tech while on someone else's dime.) That makes this more of a retrofit to a current design than a new device, but then again so was the XO-1.75.
There's no word today on when the XO-1.75 Touch will leave the factory; given OLPC's past hardware roll outs I would not expect to see it in less than a year. That's a pity, because this hardware revision could really have benefited students. I also think it's long overdue; Neonode's touchscreen tech has been around since 2010, and given the clear and growing value of a touchscreen this is a move that OLPC should have made long ago.
I really think that the XO-1.75 should have been launched with a touchscreen when it was first unveiled at CES 2011; now it's going to have to go through certification again.