Also, this:
http://www.techspot.com/news/47178-25-raspberry-pi-twice-as-powerful-as-iphone-4s-gpu-burns-tegra-2.html
Especially to the "Its an underpowered, worthless POS!!!" crowd.
Also, there is no issue running linux in 256 MB. There is a problem, say, running LibreOffice, a 720P video in Mplayer, TuxRacer,ripping a CD, and playing on armor games in 256MB of memory at once, maybe...
Remember, this 256mb of RAM is shared between the GPU and CPU. There is zero dedicated VRAM, so you could say that there is 128mb RAM and 128mb VRAM, or if you are running extremely demanding graphics programs at very high resolutions, I suppose it might be possible to use more than half of the available RAM for VRAM and the GPU, which could conceivably leave you with less than 128mb of RAM for the rest of the system and the CPU.
Given the right version of Linux, like others here have suggested, the 256mb of combined RAM might be okay for most of the circumstances and situations, but it is hardly a generous amount of RAM when you consider that it is combined VRAM and CPU RAM. You would never want a full desktop system with that low amount of RAM, would you?
MorphOS probably only takes up around 40mb to 45mb of RAM when loaded on my Efika (IIRC), which would leave me with approx. 83mb to 88mb of free RAM after it boots up.
If the Linux being used on the Raspberry Pi only uses slightly more RAM to boot up, it will work fine in most circumstances. Remember, one of the heavily advertised points of the Raspberry Pi, is that it can palyback 1080p video content, so I am sure more than a few people are buying it with that in mind and want to use those great video playback capabilities, which will no doubt use a big chunk of that shared 256mb of RAM.