Is this mainly competing on price, or does it have additional advantages vs. existing consoles?
It has more ram than current generation consoles, otherwise it's relatively underpowered.
It is running android which can be a blessing and a curse. NDK development hasn't been that enjoyable in my experience, but a dearth of programmers are already familiar with the OS and Ouya's goal is to attract independent developers(all the major consoles are relatively difficult to break into as an indy developer unless you're fine with living on the indycade on the 360).
So pros: ram and low barrier of entry both for developers (open platform) and users (it costs $99)
Cons: slow
> Cons: slow
could be seen as a pro - the constraints might inspire creativity. Think back to the old days of computing, when all you had was 16k of memory!