Wow, that's a really cool project, sass!
Regarding Windows on these laptops, I can see cases both for and against. First, presumably Gates would not be looking to make a profit here. Microsoft already donates many millions of dollars worth of software and computers to local schools in the Seattle area. I believe the idea would probably be to donate copies of Windows (probably stripped down for size reasons).
On the for side, it would enable people to easily write and deploy compelling applications for these kids. After all, a computer with no software is pretty useless. Technologies like the .NET Framework make it very easy to develop good applications fast. And the kids would grow up knowing a technology that would be immediately useful in their day-to-day life, should they choose to explore working in cities or developed nations. (Not a slam on Linux - it's just that desktops are obviously ruled by Windows.)
On the against side, Linux plus Java provide a very similar framework for application development, and that combination would definitely be free. Also, there would be some concerns over security update-ability of a system that is not reliably connected to the internet (although it would be a mistake to imagine that Linux and Java are immune to security issues).
Anyway, it's certainly a cool project. I'm excited to see what comes of it!
SNG