The Motorola Droid is a fine device, but it's also an expensive device. It's clear that Motorola needs big, flashy devices like the Droid to rebuild their name and create hype for their Android line. As useful as the Droid is, Moto knows they also need to be able to deliver ultra-low cost devices if they really want to gobble up market share. Enter the LaJolla.
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Android and Me found several references to the LaJolla (as well as the Zeppelin and Motus) in the source code for the Cliq. They've been able to dig some specs out of the code; a 528 MHz ARM11 processor, MAX7359 keyboard, Kionix 3-axis accelerometer driver, and a Halo i2c 240x400 touchscreen.
Until very recently, Android did not support screen sizes that small. But today Google released the 2.0.1 SDK, which supports several new screen sizes, including 240x400. So, we've got a lower-end processor and a tiny screen...budget Android smartphone, anyone? Moto has previously expressed interest in making devices that hit at the $150-$250 price point (the Droid is $559). It seems likely that the LaJolla is just the device they've been working on.
All of this is still unconfirmed. We'll keep you updated as the story continues to develop.