It will not be a thick, expensive, powerful, full blown computer that lets you run Final Cut Pro with a stylus while walking to the train station. It will be a thin, relatively affordable, dedicated use, embedded type device that will pretty much do what a netbook can do, but in an uncomputery, Apple way.
Email, web, home media playback, ebook reader, Voip calls, maybe a few widgets as a screensaver. The iPod Touch for your home. A home media and communication device, always on, sitting in a dock, ready to pick up and use.