There was a thread that discussed the prospects of a Raspberry PI specific Linux distribution, amongst other things a while back- I thought I ought to get everyone an update on my progress with the tinkerings I mentioned in the thread.
A couple of days ago, I got an ARMv6 optimized console based userland that I'm doing a bit of initial QEMU tinkering with on that I suspect would probably boot on the R-Pi. I've also got an X11 userland- but I'm fairly certain that it wouldn't work right except in a framebuffer mode of operation. I've started doing the work towards integrating the publicly provided patches to the 2.6.37 kernel to work with the board, but it's not been finished and validated that it'll build right within OpenEmbedded as an Angstrom variant. As it stands, the userlands are packagable as .ipk, .deb, and .rpm packages right now, though I've only done .ipk's.
So, all things considered, we should have something fully tuned shortly after they start selling the things.