Technically not just a watch might be more accurate since they describe one of its functions as a "GPS sports watch" and sell watch straps for it (as well as bike mounts, armbands, clothing-clips).
Yes, the nice thing about the MOTOACTV is that it runs independently, you can sync it when you are at home, or near your Android phone. The music player is surprisingly good and the headset is OK too.
Another nice one: if you decide to take the phone with you, it functions as a wireless headset!
We actually use an Android app on a rooted ACTV, strapped to a hexacopter to map out Wifi hotspots. It works in limited tests, but for obvious reasons we would never take it out into the real world.
It's a really good, cheap, embedded platform. I wouldn't be surprised (despite the so called firewall) that Motorola engineers are working with the WIMM Labs folks on the Nexus Watch.