Originally, the next OLPC XO was supposed to be a two-screen foldable device named XO-2, but plans for it were scrapped. The XO-3 is a bit more of a conventional beast, falling in line with the current tablet buzz that originated with rumors of the fabled Apple tablet, which may or may not be what the Cupertino giant is currently working on.
It's just a concept at this point, but it's poised to have a 8.5 x 11 touchscreen, a camera on the back of the device, induction charger and a foldable carrying ring on one of its corners. The design looks a tad too optimistic for a cheap device (the price is supposed to be $75), since it's extremely thin (thinner, for example, than an iPhone), but hey, it's a concept, why not make it beautiful while it's still cheap?
According to Engadget, the XO-3 should be coming to the market in 2012, and the OLPC has two updates to the current version -- the XO-1.5 and the XO-1.75 -- slated to fill the gap until then. It's a bit far off, but if this is the future of cheap, mobile computing, I'm hopping on the bandwagon.