Emulate according to Dictionary.com:
"to imitate (a particular computer system) by using a software system, often including a microprogram or another computer that enables it to do the same work, run the same programs, etc., as the first."
All they are saying is that it is copying the HTC or iPhone software. There are many clones out there that do this. Check out some of the touchscreen Personal Media Players on ebay. Many of them use an OS that resembles the iPhone or Ipod Touch. This does not mean they use the exact OS and have copied it - it just means they emulated it.
Now, my biggest worry is the shipping and responsiveness of this seller. They seem to have done Chippy right, and delivered it quickly. I took a chance and ordered mine from the same place. If anyone has any doubts about it, wait until I get mine and do my review and then make your decision. I promise to be very active on the forum and answer all the questions I can.
The form factor is one of the biggest reasons to go for a product like this. I've not seen another product with this form factor and size for this type of price. Chippy from UMPC has one and seems quite impressed. Mine is on the way and I'll be doing a review for it asap. One thing I want to stress, and I think Chippy also said this, is that this isn't going to replace your UMPC or Laptop.
I was on the chat when Chippy was doing the live unboxing of the SmartQ 7. He was actually answering some of the questions I was asking. Because of his help, I was able to see this thing live and being used. Other than having it sitting in my own lap, I don't think it could be any better than that. He answered questions that were very important to me in order to feel like I could use it.
So, if you are looking for an LCD device, with a decent battery life, a possible community from Mer, Plays MP3s while reading and has the battery to do it without dying in an hour, surfs the net, with some tweaking can remote to your PC and more - well this seems like a great deal to me. If you can find a better deal on a device like this in this form factor - please let me know.
EDIT: If you have a Nokia N770/8x0 Internet Tablet and like reading on it but wanted a bigger screen - this is a great device. Someone above mentioned the Jetbook. I hear the Jetbook is a great ebook device, but again its a single purpose device. I could live with that, because it is LCD, but what I can't live without is a backlight. The Jetbook does not have a backlight.