Yeah, I understand that BH, and i think it is a mistake to go this direction imho. These type of devices will never catch on with the big volume consumer market. The brand customers will not make the investments (confirmed order+marketing$) because price/performance does not balance out and there is only niche market appeal. In general, larger Taiwan ODMs need to have orders in place or else they can’t get commitments (and lower pricing) from component suppliers. Also they do not want hold any inventory in their warehouses because technology moves too fast and they do not want to get stuck with outdated product. This a a big problem for smaller manufacturers that are trying to do it with their own branding. Just to make 1000 first run protypes to ship samples to buyers is a big investment.
A couple of examples of niche players are dualcor.com/ The OQO has been around for a good 5/6 years. The dualcor device is an interesting hyrid device with dual processors and OS. (but at 1500 they are dreaming). The only advantage for a mini form factor full XP system is that it can run desktop versions of apps like excel or proE or photoshop/multimedia design, etc. With a external kb/monitor connected the convenience is nice, but i think still too much . Sell the device as a cheap $300~350, easy to use wireless websurfer~mediaplayer or biz communicator (like for waiters/finance/students/etc.) and it will have some success plus still give a manufacturer a nice ROI.
Edit: Another factor changing the way we use PCs is that with very cheap/free online storage and “live” applications from MS (and Google/opensouce a few others just coming online) you really do not need a lot of storage memory. Flash is cheap and is used for both storage and to run the apps. With a SD or microSD card, you can have GBs worth of storage for your media as well.
Add this useful, but unrelated link I came across: www.bugmenot.com (who needs to remember all those passwords…)