I don't see this as a competitor to netbooks. Netbooks run a full version of Windows, not a limited iPhone OS. They are also fairly inexpensive. I see this as being a big iPod Touch with 3G data capability. The problem is you still need to own a phone (I suppose you could downgrade to a dumb phone if you own this with 3G data) and you still need to own a notebook computer.
A full version of Windows that you can't do much with because of the screen and keyboard limitations.
That's not a flippant comment. If netbooks were that good, far more people would be buying them (and far fewer would be returning them). They have a rounding-error share of the market compared to "real" laptops, for reasons that are sound regardless of what us tech dorks think.
(Personally, I'm still waiting for my Dick Tracy communicator watch.)