I was thinking about my ARM + FPGA computer idea some more. There's already a lot of competition in the single board computer space and adding just another entry there isn't really worthwhile on a small scale, the prices would just be too high to attract any users. However, there's currently a rather small market for single board computer kits with free software like ideals.
What if the goals of the kit were to be a free hardware project? By free hardware, I mean as close to open source / free software ideals as possible. The specifications, schematics, BOM, layout, and manufacturing files would all be created using free software and available to everyone. If you wanted to build your own version of the computer, you can either take the files and modify them and build one yourself, buy each component from the vendor of your choice, or buy pre-built models from a vendor. Different vendors could compete with a commodity (the free hardware design kits) but also have the freedom to modify the kits to add extra functionality, reduce costs, or change things all together. It'd be a reference design but with a free hardware spin.
Along with publishing the design of the hardware, there'd also be a book like Cross Linux From Scratch made specific for the released designs. With the combination of free hardware and free documentation, it'd be an amazing teaching tool for people wanting to learn about embedded systems.
Currently, projects like the BeagleBoard offer some of their design files online for free, but you'll need expensive tools in order to edit them. There are free software tools out there that are capable (gEDA) along with lower cost tools (Eagle). If you want to attract hobbyists and very small companies to the embedded Linux market, using low cost or free software tools and providing high quality documentation is the way to go.