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Engadget recently wrote about Paul Allen's flipstart umpc at flipstart.com. It's the size of a paperback, built-in keyboard, usb ports, Sprint evdo ready. RAM at 512MB isn't great but CPU is 1.1 GHz. It comes with XP or Vista and runs MS compatible apps. Battery life is only 3-6 hours. The price was just halved to 699 USD. I don't know what that might portend. Wikipedia has more info and links to different reviews. This seems to fit the bill for a pocket-portable PC but you'd probably have to carry an extra battery.
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