DisplayLink adapters will be supported shortly, see Release notes/12.1.0#DisplayLink_USB-VGA.
 Adding a DisplayLink USB-VGA adapter on XO-1.5
I was somewhat successful making this adapter work on my XO-1.5 running Fedora 11 (os205)
Install kernel development libraries and get the udlfb kernel driver
yum install kernel-devel kernel-headers gcc glibc glibc-devel glibc-headers git clone http://git.plugable.com/webdav/udlfb/
- make & make install it
- Your external display should go green when you install the kernel module
- Get xorg development libraries and the xorg driver
sudo yum install xorg-x11-server-devel.i586 git clone http://git.plugable.com/webdav/xf-video-udlfb/
- make and make install it
- copy the (incorrectly installed) driver to the right place
sudo cp -a /usr/local/lib/xorg/modules/drivers/* /usr/lib/xorg/modules/drivers/
- Set up xorg.conf (this is the difficult bit).
I was able to make this work with either the external display or the built in panel, but not both at the same time. If the panel comes first in ServerLayout, then the external display is not used at all. If the external display comes first then both displays "work", but the built in panel has severe graphics corruption. I created two ServerLayout sections and hacked olpc-dm to select the external display if it was plugged in on boot.
(Originally by user Carrot -- moved here from Adding USB SVGA)