HP will get an HP-branded digital music player based on the iPod, while Apple will have iTunes and a desktop icon pointing to iTunes Music Store preinstalled on all HP consumer laptops and desktops. The new HP music player will be available this summer and will be "competitively priced to other digital music players current available."
Also very interesting, Wired.com reports that there will be no support for WMA-formatted music. Apple and their AAC-encoded (and DRM protected) music are quickly becoming the "Microsoft" of music. Haven't seen any really nasty tactics from Apple, except that they are of course working quite closely with the recording industry.
Update 2 Steve Gillmor does a good job of analysis as well, calling the deal a "a route around the Macs 5% market share" for Apple and for HP, allowing it to "[vault] from No. 2 in the PC market to co-leader in the mobile music space, tying the two platforms together in the process".
Update: go read Daring Fireball -- he does an excellent job pontificating about this deal, the main take away point being is that Apple has actually created a platform for digital media, with the three-way combo of software, player, and store...and it's one less thing that HP has to go to Microsoft for.
Still no affordable iPod for me, but it will eventually trend downward enough (or trend upwards in importance for me) that we'll get one.