It's hardly a scientific test, but when a Cnet editor's 8 year old daughter was given the choice between an OLPC XO laptop running Windows XP or the Linux-based Sugar UI, Sugar was the winner. As Cnet points out, either OS when properly incorporated into the teaching curriculum should serve the children of developing nations equally well. Only one, however, promises to prepare our youth for middle management.
P.S. Amazon's Give One, Get One program will be limited to Linux according to Cnet and confirmed in the OLPC Wiki -- no dual-boot for you Santa.