My wife's 12" PB is her main use computer and there is a teacher here who uses it every day at work.
It just depends on your expectations.
Hello! I'm the teacher mentioned, and as he said, I use it in class every day as my main machine.
Eyoungren mentioned the PowerBook that I use in my classroom earlier in this thread - I just wanted to give some screenshots of how it's normally used. I snapped a couple at the end of classes today. First up is the Dock to show what's running - Finder, Safari, iTunes, Keynote, Word, PowerPoint, Excel, FirstClass, Calculator, QuickTime, and Preview. The second just shows all my Spaces with their open stuff.
Everything the district does and distributes is in Office, so Office 2008 is a must for proper compatibility with the XML Office stuff. I know that there are plugins for Office 2004, but they don't work nearly as well from my experience. I track the attendance and take care of the grading on online systems through Safari. I generally keep iTunes open to play some music while I'm eating lunch or on my planning period. FirstClass is for my school email and other district doodads. I show short video clips using QuickTime, and Calculator and Preview are pretty self explanatory.
This little machine, despite "only" having a 1.5GHz G4, only 1.25GB RAM, and running a version of OS X that's seven years and six versions out of date, handles all of this flawlessly. Add that to the fact that it's tiny, fits nicely on my desk, and has an awesome keyboard (I still like the keyboard on the PowerBooks better than the island on the MacBooks and post-unibody Pros, although I don't really mind that keyboard) and you have the perfect companion notebook for a teacher.