[Mark Rejhon]

I think the real truth is somewhere in between. It's definitely a slimmed down version of MacOS X, but much more closely related to the original MacOS X than WindowsCE is related to Windows XP.

For example, embedded versions of Linux can run pretty much the same software as the full fledged Linux operating systems -- for example, the same utilities without even a recompile. Some libraries (i.e. X11 and color graphics) may be missing, but things like emacs would work out-of-the-box if it was the same CPU architecture, or can easily be recompiled.

It is probably using some 800 Mhz or 1 Ghz Intel XScale CPU -- though shockingly it might use some kind of ULV x86 CPU (I doubt it through -- after all Mac OS X is very easy to port to other CPU's: Reportedly, they succeeded getting a port running on Intel ahead of schedule, during an internal milestone). Efficient programming, and a good nVidia 3D accelerator may work to only require a standard 624 Mhz Xscale. (After all, iPhone is reportedly using the PortalPlayer chip, which I understand was aquired).

However, its processing horsepower seems impressive -- reading apple specs say the 5 hour battery life for video playback applies to playing H.264 video at 640x480 at 1.5 megabits per second. This is literally HDTV quality for a handheld at the 160dpi such a small screen uses. (because of the smallness of the screen, the better quality videos would look better than DVD in a relative sharpness scale) However, this may be from extra chips (i.e. PortalPlayer or nVidia 3D video chip).

Based on news I've read in the past, I'm 75% sure it's probably using an PortalPlayer chip, an nVidia 3D chip and an Intel XScale chip. For the PortalPlayer chip, google past news and you will see what I mean. The nVidia 3D video chip for handhelds, similiar to the 3D chip now in Dell X51v - just because it seems to be the best available handheld GPU for the nifty smooth effects on the iPhone. And an Intel XScale, anywhere between 624Mhz and a gigahertz; already used in many handhelds - just because Apple now has a relationship with Intel and the rumors abound, plus the ULV x86's are not small enough to fit into a sub-5-ounce iPhone (UMPC's are not that light yet, and battery life is not as long as 5 hours for a battery in such a tiny gadget no larger than an 8700). Or a combination of chips thereof - I'm not familiar whether or not nVidia has merged a PortalPlayer type chip into a handheld 3D chip, to save on motherboard space, and maybe it's a single chip solution already - or a top secret in-house chip. They were impressively secretive!