I'll grant that. But whether or not someone prefers the computer or the appliance depends on the software they choose.

I'm sure there is some substitution between the categories, but I guess I still think of them as pretty separate.

Pesonally, I have a phone that runs both ssh and vi (a Samsung i760 Windows Mobile 6 phone with a touchscreen and slideout keyboard), and I'm still interested in getting an Eee.

These appliances are connected devices, which means that all they need to be are small wireless dumb terminals. Increases in bandwidth and improvements in distributed computing (cloud computing to be buzzword compliant) will make this even more so.