Who said that we need another F500 or a new Mini?
Who said that funky and cool needs to be vintage and supported by a 40-60 years old history?
But it will certainly blend the best of both world: Mini/F500 coolness but with the practicality of a MiTo.
Who said we need another MiTo?

And what's so cool on the A1?

The customizable roof arch? Mind the car will NOT look like the Metroproject Concept but rather more like A1 SB concept - yet with 3 instead of 5 doors.
Sure the car will be cute- like all fancy small cars are. Incl. MiTo. But cool & funky? What makes car cool & funky anyway? IMO it's the iconic status - either as a part of heritage, or due to being a pioneer (smart, Prius etc). Is MiTo cool? To the degree that it's a small typical Alfa. Same case with A1: it's a cool little Audi.
Regarding A1 interior ... quite some details indicating many parts will come directly from VAG bag - shared with Polo, Ibiza. Yet i'm sure some features will be available not seen on Polo & Ibiza though. And some magic Audi touch will be added - great materials + fit&finish.
Will the car sell? Sure it will. It's more premium & exclusive than top-end Polo, ibiza, 207, corsa, fiesta etc. And sporty in nature like MINI & MiTo - looking typical Audi & modern (just like miTo is looking modern & typical Alfa), while eg. MINI is retro & typical MINI (toyish).
IMO it's a more serious alternative to F500 & MINI -much less toyish looking. Something on par with MiTo - but with more brand image.
Will it be bought to express & communicate coolness? I don't think so. It will be bought just like any other Audi: to show status in the segment. If that's cool, than be it so.
But Mercedes did a superb job with the Smart, it's a modern icon of small premium urban cars.
And as we can see it works for micro car only. all the other projects (Roadster, Coupe, ForFour were failures).
I'm also going to argue the premium status of smart.
Why ForTwo was successful? Because it has no rivals - therefore premium price. Due monopoly. Now when cheaper rival are available (eg. Toyota IQ), smart is not doing so well. Sales in 2009 are down - despite the state subsidies for buyers when buying a new car (in eg. Germany & France) - while eg. IQ sales exploded, especially due to the subsidies. And that indicates smart is overpriced for what it offers. Interior? Nothing premium at all. Exterior? Even less. So, the premium smart offered was only the monopoly in the segment.
If smart / MB wants to charge such a ridiculous price for smart they better offer something premium rivals don't offer. IMO with more rivals available, smart will either have to offer some premium stuff, or lower the prices.
I can't imagine smart doing well (if nothing changes) when eg. BMW Isetta or Fiat Topolino are offered. Also with cute design, various customizable features, and - heritage + iconic status. IMO MB will have to outsmart the smart a lot in the next generation to stay competitive.