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I don't think it really WOULD compete with a laptop. For me, it would be something to fall between my handheld and my laptop - more capable than my X50V and more portable than my Thinkpad (and all the accessories that I think I need when I use it).
I think I'd be more inclined toward a 7" screen as I'm no spring chicken, and I do want to be able to watch movies on it from time to time. I think it'd be great to have a little PC that I can lean up on its stand and surf and monitor email in the house, out in the garage, or kicked back with a cool one in the lawnchair.
I've always wished my handhelds were more like little PCs. Why not a little PC?
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I used to be indecisive. Now I'm just not sure.
Palm: m105, T1, T3, T650, LifeDrive, T5, 755p
Windows Mobile: X5-400, HP2125, X50v, Moto Q Black
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