The iconography we've developed for computers in the first world are fairly arcane and even educated Americans have a hard time understanding them. For a child living in a rural third world country for whom the OLPC is the first computer they've seen, many of the icons will be complete nonsense.
This isn't necessarily a terrible problem. As long as an icon is visually distinct, users (especially kids) can learn what the icon means through trial and error. But at that point, we might as well use random icons.
None of the paragraph tools are really metaphors, so they seem to translate well.
Insert Image suggests some sort of shapes or pictures, which is good.
Undo and Redo aren't very explanatory. I assume the basic arrow iconography is somewhat universal, but I doubt anyone would guess Undo. Still, they are somewhat consistent in that undo goes one way and redo goes the other.
Cut, Copy, and Paste: Of these, only "Copy" is somewhat self-explanatory. Cut and Paste require that you know what scissors and a clipboard are, and I have a feeling a lot of kids aren't going to have seen either of those.
Bold, Italic, and Underline only work for languages with Arabic characters. Besides, I don't think they are used for chinese characters (one random person on IRC seemed to think this was true too, but I don't have good verification.)
The Save/Open/New metaphors are bad enough for people in 1st world countries, but for an OLPC user, floppy discs, manila folders, and loose-leaf paper will be meaningless.
The life saver as help is unlikely to be a universally recognized metaphor.