The module is at a stage now where you can download data for a specific region from OpenStreetMap, parse it, filter it by certain tags (and their values, if desired) and then create basic location-enabled Drupal nodes based on the results. Because it ties into the existing location module any other modules which rely on the location API can begin to use these new OpenStreetMap nodes, for example by plotting them on a map, by making the information available through RSS feeds or by displaying them in Google Earth.
I also started working on an OpenLayers module, and at work have been putting effort into improving the MapBuilder module that Nedjo Rogers started a year or so ago. Both of these modules will allow us to reduce dependence in Drupal on commercial mapping providers, instead moving towards using data from other, standards compliant, sources.
Assuming there aren't too many distractions over the coming week or so, I hope to have at least an alpha-quality OpenStreetMap module available soon. Phase one of the module will simply be allowing site admins to keep their local information site up-to-date with geodata from OpenStreetMap. Future phases will almost certainly allow for editing of data and the publishing of that back to the OpenStreetMap project.