An interesting package arrived in my household the other day: a small bright green-and-white laptop with a built-in carrying handle. It looks as if it has been designed by Fisher-Price, an impression reinforced by two little 'ears' which, when unclipped, double as wi-fi antennae. The 7.5in screen rotates and folds back on itself to form a kind of tablet, rather like those pricey Toshiba laptops only Microsoft salespeople can afford.

The keyboard is rubberised, so that it can survive spillages. The machine has no moving parts, and can (so I'm told) be dropped from five feet without significant damage.

When switched on, it immediately senses sibling machines in the immediate vicinity and establishes a wireless connection with them. It also sniffs out conventional wi-fi networks and allows you to connect to them if their owners permit it.

It has no fan, so is totally silent, weighs 3.2lbs, has three USB ports plus sockets for microphone and headphones and a slot for a Secure Digital card of the kind used in digital cameras. It has an onboard camera. One battery charge gives about six hours of normal usage or 24 hours of passive reading.

It's the celebrated '$100 laptop', the brainchild of the One Laptop Per Child (OLPC) project (www.laptop.org). Its designers have christened it the XO. I paid $200 for it. Actually, I laid out $399, which got me two machines, on condition that one was donated to a child in a poor country where OLPC has an established programme in place. It's what they call the 'Buy two, get one' initiative (www.xogiving.org).

Technically, the XO is deliciously innovative. The screen, for instance, is quite remarkable; it is the only laptop I've ever used which is readable in direct sunlight. The power-management is clever, switching off anything that's not needed at any particular moment to conserve energy. The user interface is unlike anything seen before on a mainstream project: instead of a melee of windows, task-bars and folders, there are three buttons. One shows your network neighbourhood - who and what are within wireless range; a second shows an icon representing you surrounded by whatever applications you happen to have running; a third brings up the currently chosen program.

This unconventional interface may explain the critical reviews it has received - including a rather snooty piece in the Economist, which is normally very perceptive about technology. Critics need to remember that this is targeted at users who have never seen a computer.

The XO comes with a word processor, web browser, calculator, PDF reader, a few games, three music programs, a painting application and a chat program. It also has several programming environments of varying complexity, allowing users to access - and change - the underlying code of many of the applications. This is made possible by the fact that the XO runs the Linux operating system.

This last fact engendered initial hostility from Microsoft, though that has apparently abated. What proved more problematic was the hostility of Intel, the chip manufacturer, which may have stemmed from the fact that the XO's processor comes from AMD, an Intel competitor, and possibly also the fear that a successful OLPC would prejudice the chances of selling billions of Intel-powered machines to the world's poor.

Intel launched a competing machine, the $300 'Classmate', which looked awfully like an OLPC 'spoiler'. The PR blowback was so severe that, in the end, the chip giant sued for peace and joined the OLPC board.

It was a strange marriage. The first big contract signed by OLPC was with the government of Peru, which bought 300,000 XOs. Its vice-minister for education was then visited by an Intel salesperson, who is said to have comprehensively disparaged the little green machine. The politician apparently took notes of the exchange, which he then shared with Nicholas Negroponte, co-founder of the OLPC project, who shared them with Fortune magazine. 'It was unbelievable,' according to Negroponte. '"The XO doesn't work, and you have no idea the mistake you've made. You'll get into big trouble", that kind of stuff. We kept the sale, but when one of your partners does that, what do you do?'

I'd have kicked Intel out, but the company jumped before it was pushed, saying things had reached a 'philosophical impasse'. Nice euphemism. Like the philosophical impasse separating the World Food Organisation and McDonald's.