One should note this is the first phone developed by Google under control of Motorola. When this is released, it will finally answer many questions about how much Google will influence them. This news about the lack of bezel is the first sign that Google might be willing to use Motorola as a test lab for weird innovation.
While the microphone and buttons (if any) fit well on device's edges, I wonder how do they provide earpiece? Do they drill a hole through the display, or is it some sort of flat panel speaker? The later probably would be bad for privacy.
First, you could put the piezo film (commonly used in speakers for cellphones, more efficient for smaller transducers but requires a special amplifier) directly below (but in contact with) the display and use the display as the 'diaphragm'. Makes the entire display a speaker, but would require some interesting sound cancelling tricks to avoid feedback with the microphone.
Second, you could use a piezo below the display with an airgap and use something akin to the laser used in the power LEDs on the Macbooks to poke enough airholes to direct the sound toward the ear.
A third method, which I'm not sure would work, is to suspend the piezo material between two ITO layers (like that used in the capacitive touchscreen) and put it above the display. Depends on if someone has found a transparent piezoelectric material yet; I haven't been keeping up with the materials science side of things.
I'm curious to see the usability. If I look at the way I usually hold my phone, about 5-7mm of the front are obscured. I'm not saying this is bad, but I'd have to see it in action.
Most probably, and they will sue Apple if they ever use a similar design. Motorola is under Google's management now. So, they must do whatever it takes to protect the Android ecosystem and thattheir partners. Sadly, that mostly means to sue somebody these days.