When is the last time you actually used the CD drive in your computer?
I was in the market for a small laptop a month or 2 ago. I realized that on a day to day basis I don't swap around huge files, game, or do much more than ssh/rdp, surf the web and check email. I went with this:
http://www.newegg.com/Product/Product.aspx?Item=N82E16834220246
Yep, 7" display, 4G hard drive 512 megs of ram. I haven't touched my desktop other than to setup a connection between the two to share file since.
I'm no mac fanboi but I think apple has hit the nail on the head in a growing a market niche in this one.