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No damage to the hard disk, assuming you don't drop it or something.
The LCD image will still look fine; convertible tablet PCs look good at any orientation. I worked on a 17" PowerMac for three years and the screens on those things are quite gorgeous.
On the other hand, the form factor of these note books make this really inconvenient. I tried it with a 12" iBook for a while, but the weight really makes it a poor proposition...probably why people want the fabled Mac tablet (which I don't think is a real product we're ever going to see).
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