For this you get an Intel based (Pentium-M 900MHz), Linux based system with a 7" screen and built-in WIFI, webcam and sound - and weighs just 0.92 kg. And while it only has 2GB storage space, it's weight and size make it perfect for carrying around web browsing, Facebook, email, etc. On line applications such as Googlemail, Google Google spreadsheets, Google calender and so on mean that there's really no need for large storage anyway.
I'm tempted. The iPod touch is tempting too, similar sort of price and even smaller but lacking proper keyboard.
http://eeepc.asus.com

Comprehensive review from Trusted Reviews on link below
http://www.trustedreviews.com/notebooks/review/2007/10/30/Asus-Eee-PC-4G-701/p1