I can confirm it's working nicely, completely playable, and the controls are remarkably smooth considering it's a touchscreen. I find it runs considerably better at 1.5ghz (no complaints here), and there's a patch floating around right now that'll boost the graphics up to ipad-comparable.
The joystick pops down wherever you put your thumb, which is nice and comfortable (no searching for it, it just auto-centers to wherever you tap), and the other buttons are large enough to hit without issue. Driving is easy, looking around is easy, switching weapons is easy.
It's well thought out and the control scheme works far better than I would have assumed it could have.
There's also the option of mapping the whole thing to a sixaxis, but carrying around a freaking game controller sortof ruins the whole "casual gaming" aspect of picking up a touchpad and having some fun.
Anyway, I'd recommend it - although be warned, your memories of GTA3 are going to be fonder than the actual experience. I forgot just how heavyhanded and ridiculous this game is

. A few shots from the game on the touchpad:
Click to view quoted image
Click to view quoted image