Could it run Linux games? Sure. But the problem comes with drivers and the kernel. I know failoverflow announced in the beginning of the year that they got 3D acceleration working with the GPU (so some games will actually "run") but the CPU is still bottlenecked to <1ghz (I forgot the exact number, but it wasn't great) so nothing really runs well at the moment. Until they fix those issues (and release it), nothing heavy is going to run.
But I don't think failoverflow has announced any progress since March, so even if the 4.01 exploit is released you won't be running anything until failoverflow (or someone else) updates the codebase.