This is, as Andy Baio calls it, “a clever hack”, and that’s about it. It is worthy of note primarily because it is, as far as I know, the first time a non-Apple OS has been installed on the iPhone hardware. At least, the first time in public.
The real power of the iPhone isn’t that it’s got a pretty shell or the best capacitive touchscreen on the market. The power of the iPhone is the interplay between hardware and software that were designed to compliment each other by teams of carefully chosen engineers whose only job was to make the iPhone hardware and software fit each other perfectly.