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I'm bullish on tablets myself; I've used three of them over the past two and half years to varying degrees of satisfaction. There are still some serious problems.
Hardware has to catch up. Batteries need to provide power longer with less weight, and this is still the biggest obstacle. Rlauzon is right; for tablets to really work in their target markets an 8-hour runtime is key. Power consumption needs to be reduced, which Intel is managing quite well with the Pentium M chips. Hitachi's micro-drives are also making good progress increasing data density in small form factors.
Microsoft needs to eliminate the price premium for the Tablet version of Windows. One would hope this would happen in Vista, but given the rumors that Vista will ship in up to 7(!) different versions, this seems unlikely. More likely one of those versions will strip some of the extraneous eye-candy from the GUI for use on constrained devices like tablets.
I'm hopeful for the Fujitsu Lifebook 1500, which I've got on order (if my vendor can ever figure out if they're actually in stock or not!). I hope to write up a detailed review once I've had a chance to play around on it, with some emphasis on the e-book dimension.
In the end I think there's going to be some really killer tablet style hardware about 5 years or so out. For all their faults, MS has deep pockets and will keep chipping away at the problem.
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