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I was really really hoping the OpenMoko phone wouldn't have been such a flop AND cost a ton. My guess is you need the resources (more that just money) a company such as Google can provide to currently develop and popularize an Open Source phone.

Any genius here capable of shaking up that market?

How about the Nokia N900? It's a fully open Linux phone made by a company with a lot of resources (and the need to push the platform, in light of Symbian's failure to live up to expectations).

http://maemo.nokia.com/n900

Any ideas on cost?
about 600$ - phone is available for pre-order on amazon.

Nokia N900 Unlocked Cell Phone/Mobile Computer with 3.5-Inch Touch Screen, QWERTY, 5 MP Camera, Maemo Browser, 32 GB--U.S. Version with Full Warranty by Nokia

Supposedly, it ships on the 19th. I pre-ordered. :)
One of the things that made OpenMoko's FreeRunner interesting was that it was also an open hardware platform - all parts used had publicly available documentation, there was a debug port with direct access to all low-level hardware, and effort was made to make it hardware-hacker friendly. The N900 looks nice, but it's not near as open as the FreeRunner.
Anybody interested in this device? I don't see who would want to buy it?
If one could lower the cost to $20 or lower, and include WiFi with an open mesh mode, then I could see a market for this. (But it would be grade school children!)
Free app on a device I already carry around all day vs. $99 single use-case app... no brainer.
Exactly! This would be great for those people that find computers too complicated.