It'll be an eBook reader, also
The "netbook" concept is really only compelling to those Mac users who haven't actually owned one. The MSI Wind units, when setup as OSX boxes, really let you compare OSX running on somewhat inferior hardware. The single-core Atom (@1.6GHz) isn't a bad performer; I was actually able to run Office 2008 on it (albeit a bit slower than it runs on my Intel iMac). The wireless hardware is inferior to Apple's but, as it's a mini-slot, the card may be swapped out (and I did) for a Realtek card. All that's needed there is better software. The one place the Wind umm...breaks wind, I guess...is the trackpad; MSI did a bait and switch. The original units came with Synaptics units which worked very well. The later units came with a Sentelic trackpad which, frankly, sucked so badly I sold the unit. Windows users are used to crapola so many don't complain about it. Mac users expect flawless performance here.
So, for the added cost of a decent trackpad and wireless card, it would have been a very nice Mac-wannabe (as OSX did work quite nicely).
But Apple won't want to wallow in the muck of this netbook market - at least in the same context as MSI, Asus, and Dell. I think what we'll see will be coming at the netbook from the iPod/iPhone perspective but without that obscene monthly AT&T phone bill. Let's call it the iPod Touch Grande. As such, it will permit connection (wirelessly or through a dock) to your Mac (or through WiFi) where it will be able to connect to the iTunes Store and/or (through a plugin or new version of iTunes) Amazon where one may purchase all the cool media goodness from Apple and books from Amazon.
But Apple will go one step further and allow all non-DRM'd media to be added to the Grande - MP3, MP4, PDF, TXT, DOC, etc. After all, this is still a Mac, right? You'll be installing your usual apps (assuming you can run them in "tablet" mode).
There will undoubtedly be more functionality than I've listed but I believe this is the opportunity for Apple to effect yet another paradigm shift. Imagine an eBook reader that lets students eliminate textbooks. Before you say that won't happen, consider that a number of universities are already there. Students pay a fee per class to access PDFs of specific textbook chapters, copyrighted articles, etc.
Color screen, pressure-sensitivity, multi-touch UI, universal media, and the possibility of running many Mac apps. This may also be the universal device that lets school districts reduce overall costs relating to textbooks and permit teachers to monitor more closely what their students are doing.
Of course, I could be totally wrong and Apple really will attack the netbook market without more differentiation than "we run OSX!"...but do you really think so?