I was just thinking, wasn't Steve talking about all sorts of new "toys" comming out, especially now that we're x86 during some keynote?
Here are the specs for the CHEEPEST dell Axim handheld running a watered down Windows XP wannabe that retails for $298.
*Axim X51
*Intel® 416MHz processor
*128MB ROM (like the storage on the iPod Nano)
*64MB SDRAM
*3.5 inch QVGA Screen
*Bluetooth
Now, let's check out the minimum specs to run OS X.
* Macintosh computer with a PowerPC G3 (which came at speeds as low as 233 mhz)
* Built-in FireWire
* DVD Rom to install OS X "tiger"
* 256MB of RAM
* 3GB of available hard disk space (4GB if you install the developer tools)
As you can see, RAM and ROM are what's holding it back from running OS X on an ipod sized device. Ram is dirt cheep these days, and hard drives are getting cheeper and cheeper. If Apple released a tablet that ran OS X, which they can more than easily do, this could be it.
Or it can just be an iPod with a touch screen...