Well actually one of the reasons for the slowness in the video (disclaimer : dont own the phone, basing slowness on video) is because its processor is very slow. Its using a 400MHz ARM9 vs lets say 400MHz ARM11 on Nokia N95 or what is rumored to be 600MHz ARM11 in iPhone.

edit : That should mean that the N95 has at least twice as powerful processor as freerunner and the iphone maybe even 3x faster processor. IMO the processor chosen was just plain wrong given the goal of producing a smartphone. They should have chosen a faster SoC and forgone the GPS and accelerometers.