For one of our projects, we had a simple board designed the old fashion way -- it was basically just a bunch of interconnects between a pinto-th board and other plug in components. It would be pretty cool to redo the design in geppetto and be able to drop the pinto-th (which we only used to keep our own board design simpler.) What seems to be missing for our project would be the ability to arrange rows of 0.1" pins in specific places (so other components could plug directly into the board) and then connect those 0.1" pins to arbitrary pins on the overo (or connect one 0.1" pin to another 0.1" pin.) If we could do that I think we'd be pretty close to being able to do everything we need ... especially if the pins coming out of the overo had optional ttl level translation logic you could add.
This is a great idea if it lowers the entry barrier to designing custom embedded hardware! $2k setup fee seems steep, but by the time you count up the hours to design a board with traditional tools and all that is involved there, it's probably a pretty reasonable deal for people who are actually serious about building real boards.
Is geppetto something gumstix is developing themselves, or is it just an application of a really cool 3rd party app that I never knew existed?