I am slightly surprised by the negative reactions to the X1; resisitance to its price and to its fixed lens, mostly.
Leicas are generally expensive: it seems to me to be a digital CM, and that class of film cameras - compact, high quality, fixed lens cameras like the CM, Contax T's, etc., were expensive in their day. A 24mm Elmarit M lens by itself costs more than US$2000. The lens on the X1 may not have the same optical and mechanical quality as an M lens, but I would guess that it would be designed to match the sensor, so that there should be little or no issues with micro-lenses, IR filters, vignetting, etc.. Although the m4/3 cameras are, in some senses, revolutionary, and produce very good image quality, I think that they are still a step below an M8 in terms of image quality, and I would like to think that three or four years after the M8, the image quality of the X1 would be similar or better - the performance of the X1, unknown at the moment, will determine whether it is worth the price or not, I think. Is its CMOS sensor, of currently unknown provenance, with its currently unknown AA/IR filtration, a match for the Kodak CCD with no AA filter in the M8?
As to the fixed lens issue, there was some market in the past for the CM type cameras, and for the Sigma DP1/2 cameras now, although it may be small. Some of us are lazy about changing lenses, and tend to use just one for the vast majority of our shots. If you are interested in a fairly compact camera, then carrying extra lenses, and paying for Leica-quality extra lenses, may not be all that interesting. Interchangeable lenses would also bring up viewfinder issues, and the big question, which mount? If M-mount, then it becomes a kind of M8.3 lite, or digital CL, and would probably cannibalize M9 sales. For m4/3 mount, it would seem that rebadging a Panasonic body would be the usual response. If Leica were to build their own m4/3 body, then they would have to compete against the manufacturing capabilities of Panasonic and Olympus. m4/3 cameras can already use M lenses, although the crop factor is a bit of a problem, and I understand that there are some issues with wide angle lenses and the lack of micro-lenses on the m4/3 sensors. If Leica were to build their own m4/3 camera, they would probably also want to design and build a set of m4/3-specific lenses, making it a bigger project, and requiring Leica to compete in a relatively low-priced market - sounds like a bad idea to me.
It has a bigger sensor, probably a better lens, and probably better image quality than the Sigma DP and m4/3 competition, albeit with a fixed lens, and it is cheaper and a bit smaller and lighter, than a used M8 with a 28 Elmarith ASPH, which would be the approximate equivalent, although it lack the option of more lenses. It seems like a very interesting camera to me.