Nice pieces of history there. How on Earth did they manage to get past Cupertino's hands I don't quite get it. Well if a MBA prototype did go out, why not an iPhone?
That aside, I recall in the keynote of the iPhone that Steve had two separate teams working on the iPhone. One team dedicated to software with bogus hardware and another team working on hardware with bogus software. I recall this was to prevent the whole iPhone thing from going public (just like the Al MacBooks). It also meant very but very few people ever saw the whole device all together. I recall Steve saying only him, AT&T CEO and 8 other people had seen it.
In any case, I brought all that up because what you have on your hands is the hardware portion of the iPhone's development. The software is alpha software at best, however, I am surprised since even this alpha software can do the majority of the functions our official released 1st Gen iPhones can.
I imagine Apple made at least 1000 of these to test out, since no factory in China would make only a couple (60 or 40 to say). I may be wrong on this bit. It would be interesting to see the software developing stage of the iPhone, but I am sure we will never see that.
Oh and by the way, I concur with a previous poster who warned against updating it to 2.2.0. The hardware might be different and there may be problems. So its best no to touch the software. It will be interesting to dump the whole firmware. Since its alpha software, maybe all the Apple security is not there for developing reasons. The iPhone Dev Team can have a look at unencrypted files that can help out in unlocking the iPhone in the 3G version in the future once current exploits run out.
Edit - This thread should be in iPhone section for all to read.