I too have been intrigued by the Foleo.
Sure it isn't a Windows laptop (a good thing in my book actually) but this trade off buys you a much sleeker/pared down machine that can run well even with modest hardware specifications. If implemented properly, Linux on the Foleo can be MUCH less of a resource hog than Windows, so you'll get usability, cool operation and much better battery life too.
Folks are making the mistake of comparing the Foleo to these Windows capable sub notebooks that are all the rage in Japan but for some reason never caught on here in the U.S. That's not really a fair comparison as most of these sub notebooks come in at the >$2500-3000 price point. Remember these sub-notebooks usually don't have an internal optical drive either.
The Foleo isn't limited to only using your smartphone for internet access as it does have 802.11b/g WiFi built in. I currently use my Nokia 770 to link with the internet when WiFi isn't available via bluetooth using my RAZR. I pay an extra $20/month for unlimited net access on my wireless plan, there is a $70/month teathered PDA plan that you're supposed to use technically, but so far, my carrier hasn't noticed so I'll play dumb
I suspect that you'll be able to use the Foleo paired with even a non-smartphone in much the same way.
If the Foleo's UI is responsive and stable, has a decent looking/bright screen, the Opera Web Browser works well and can properly render/run web based applications (like Google's suite of apps, maps, etc), runs cool (no fan noise, man that would be great), and has made software development/porting available to the Linux community, I think you'll have a very useful and compelling device. The other built in applications already cover 90% of what most business users/travellers actually use their "real" notebooks for anyways.
If you need more software, it'll likely be avaiable pretty readily. Just look at the Nokia 770/880 community of Linux hackers/programmers who have ported a whole grip of quality software to this little device. Check out
www.Maemo.org and look through the various software offerings. Even if Palm dumps Foleo after a year or two (in which case, you'll be able to pick it up super cheap!!!), it'll still have a useful life as it's Linux foundations will allow for continued fan/community support and this takes alot of the anxiety out of buying one for me.
If you doubt this, just look at the case of the Nokia 770. Though it's been made obsolete by the Nokia 880, there is still a thriving community of users/developers maintaining, porting and developing new software for it. You just need a critical mass of a few hundred individuals comitted to a platform based on open source to keep it alive and viable.
Dave