Let's get the legal stuff out of the way first. Simply put, Michael Arrington's CrunchPad project broke in two, and his partner, Fusion Garage, decided to go ahead with the project anyway - this time without Arrington. This caused quite the public falling out between the two, leading to Arrington filing a lawsuit against Fusion Garage, claiming "Fraud and Deceit, Misappropriation of Business Ideas, Breach of Fiduciary Duty, Unfair Competitition and Violations of the Lanham Act".
Fusion Garage went ahead indeed, and unveiled the CrunchPad, renamed as Joo Joo, and opened up the pre-orders. What they had not yet done, though, was file an official response to Arrington's lawsuit. Back then, even, it was clear that Arrington's filing looked sloppy, and kind of fell apart because there was no contract between him and Fusion Garage.
Surprise, surprise, the sloppiness of Arrington's filing is being used extensively by Fusion Garage. I'm not going to detail all of it, since Engadget has already done a pretty good job. The conclusion is that Arrington has some serious amending to do, or else face a rather quick defeat.
Moving on, sgentrepreneurs had a talk with Fusion Garage's CEO, Chandrasekar Rathakrishnan, and Rathakrishnan said that thanks to the iPad announcement, pre-orders of the Joo Joo actually went up. If this is true, it still might not say much though, since no numbers were given out.
Rathakrishnan also detailed that an announcement will arrive this week, in which a new partner will be unveiled who will actually take care of all the manufacturing costs. Apparently, it's a major mobile phone player with "significant" market share in South-east Asia. Fusion Garage will pay royalties to this major player, which, as sgentrepreneurs rightfully points out, sounds a bit weird - you usually pay royalties to someone who owns IP.
The Joo Joo could indeed be a more appealing alternative for geeks than the iPad. The iPad will be closed off entirely, and Apple is determined to keep jailbreaking illegal, so that when you want to fully utilise your iPad, you'll be breaking the law. The Joo Joo is Linux-based, so it will most likely win out on the whole free aspect. On the other hand, it barely has any local storage (4GB), and, of course, Fusion Garage might not exactly be the stable company you want to give your money to.