Open2X is a ongoing project to provide a replacement firmware for the GP2X. It is planned for it to be a stable foundation to start serious yet easy changes. It will also ship more modern features as a replacement application kicker, an x11 server and a set of different libraries which would permit for applications to be compiled dynamically with them which will improve their runtime characteristics.
The project also provides an own development toolkit to cross-compile applications and games for the ARM9 architecture the GP2X sports. The toolkit is available for linux and windows (through a CoLinux linux compatiblity layer).
The Open2X kernel can be compiled and runs stable and well. There were issues with some of the shipped libraries in the past. The firmware is ought to be shipped in the nearer future. By this time all remaining issues should be remedied.