Here is a video of our first attempt at writing some sort of "higher level" bare-bone operating system. It's far from finished but it provides an interesting look at TCH1's speed because large bulk of the OS, including some graphics processing, is written in Lua, an interpreted language.
Sorry about the blurriness, the pronunciation and too many occurences of the word "basically".
You can watch the video in HD to see more details.
The code running on the watch (including the Lua scripts) is already available at dynawa.googlecode.com. You can check it out but in its current state it's definitely not "production quality" code and we definitely don't accept code contributions. Yet!