Yes, the screen is supposed to get warm.
The chumby dissipates about 2W during normal use (a bit more when playing audio). The energy that's not convert to RF by the wifi radio, or by the light coming from the display, or sound by the speakers, is converted to heat energy. Since the chumby is full of polyfill and enclosed in leather (neither of which are good conductors of heat), the heat has to go *somewhere*, so the screen is used as the heat sink - it's glass on metal, so it's a good conductor of heat, and it's spread across the surface.
A lot of the heat is generated by the wifi adapter - there's actually a little bit of heat conductive tape that routes the heat from the wifi card to the motherboard, which in turns passes it to the display, which radiates it to the air.
It actually isn't a lot of energy overall - it's less than a laptop in sleep mode, or a VCR or TV in standby - an AppleTV apparently draws 15W in standby. We're drawing less and we're actually *on* and doing something.