FWIW, I agree strongly about being debian-based. apt alone makes the decision an easy one, not to mention the large base of pre-compiled software.
Of course, part of the beauty of the Pandora is that it's going to be a piece o' cake for each of us to run a differently configured system with a different window manager. I'm sure several will be downloadable, ready to throw onto an SD card & be booted up. But it sure would be nice to have the default (internal) be such that most of us are content with it. And such that it plays nicely with the "Joe user" crowd as well as being inviting to the rest of us who like to push it a little harder.
Re: Ubuntu, I can see the argument about riding on their coattails. So maybe a CD (or even a bootable 512Mb SD card) could be included with the machine. Maybe just a bootable distro linked online so we can say it's done. But Ubuntu wasn't made for a machine like the Pandora. It was made for my full-size desktop with my full-size mouse/trackball. It's very cool, I agree, to see it running on the Pandora hardware. But only as a demo. It's too bloated. Running it would be a gimmick. By the time you've configured it properly for the Pandora (it's just Debian underneath: perfectly malleable) you're no longer running THEIR set of packages. It's no longer Ubuntu. How much better to forget the name and run a purely custom-fit set of packages with an interface and a design made just for the Pandora. As, e.g., Nokia did with their "web tablets".
Speaking of interface, the Pandora fits a niche in computing which is still fairly new. I hope that it will hit a sweet spot that replaces my Palm device completely and my desktop/laptop for everything except for those applications which particularly call for big screens and fast CPU's (software development, video editing, etc.). This new device may call for a different kind of interface.
I'm specifically thinking of the Nokia N800. I owned one for a couple of weeks. It was nice, though slow, and the lack of a keyboard eventually became a deal-killer for me. But its interface wasn't terrible. I definitely don't want a window manager which relies heavily on a mouse. A joystick as a mouse is even worse. On the other hand, we have a touch screen! Even on my ancient, keyboard-less Palm I rarely have need of the stylus. Which window managers/panels/etc. are going to be friendly to the touch screen, giving us big buttons to grab and intuitive gestures for control?
Personally, I'm partial to fluxbox and its family of window managers. I love their speed, their simplicity, and how easy it is to configure them. But for the most part they still seem tied to the traditional paradigm: big screen and a mouse. Yes, I configured & used lots of keyboard shortcuts with fluxbox. But multi-key keyboard shortcuts on the Pandora's little keys would be just as bad as a joystick-mouse! Both will work in a pinch, but they would be most unfortunate as primary interface methods.
Of course, since about a year ago, the new standard everyone is looking at for touch screens is the iPhone. I've not played with one, but they look snazzy from afar. What can we learn about touch-screen interaction from them?
--Todd