I recently received this as a present, and ever cynical as I am, decided to see if I could crack this "guess what I'm thinking" game. I was convinced that Nuclear Submarine would be enough to confuse it, but it got it!
Pretty much 90% of the things I was thinking of, it managed to guess after the second attempt. The remainder predominantly being items of a more adult-nature which I wouldn't imagine to be included in a kids/family toy!
With regards to educational value, the 20Q ball forces the user to think about the item they are thinking of, and whether it qualifies for the statement it is asking. For instance, is a Nuclear Submarine round? Does it float? Is Plutonium smooth, etc.
This is a perfect present for Xmas, as the whole family can get involved and come up with items for the 20Q to guess. It will also cause unexpected laughter when the ball suggests it's first answer, which is usually far-removed from the item you are thinking of! It's cheap enough to warrant itself being a stocking filler, but what a stocking filler it is!