From PS3 Informer:
"The Zeebo packs an ARM 11 main processor clocked at 400 MHz and a second ARM 9 Graphics chip clocked at 274 MHz. With this hardware, the Zeebo should be able to compete favorably with the Playstation 2 in terms of raw power.
Interestingly, the Zeebo does not use optical media of any kind. Instead, games are downloaded over a free 3G wireless connection and can be stored on 1 GB of internal flash memory inside the console. The machine also has an SD card port for game saves and other uses."