It comes with with a 120 Mhz processor, 1 megabyte filesystem, lots of I/O pins and built-in OS. When I say tiny, this is small. It has a companion display and bluetooth module.
I start to look at how easy it is to program this and I think of the hours I spent getting the Arduino Due trying to work.
This is better compared not to an Arduino (Orange County Chopper vs. Italian Scooter) but other small Cortex based micros like the Teensy which is just slightly cheaper but runs only 40% the clock speed of the Hero. Both have extensive software support which put the Arduino IDE to shame.
This looks like a great project - the right combination of polished hardware and mature Open-Source software. Definitely one that I'd like to take for a spin.