I'm actually considering getting it when/if my netbook gives in...
I have a first/second generation Eee PC 1000H that I bought in the fall of '08, and there's a glitch in the battery connection, so the transformer reaches egg-frying temperatures.
I like the idea of a virtual keyboard actually, even if it dramatically reduces work area (although you can connect it to a monitor, that completely removes the primary function). Actual keybaords, even on netbooks, get fucking gross after a while. Crums, soda and coffee stains, you name it. But I'd be real fucking scared of getting those stains on that expensive screen, instead. With the iPhone, it turns out that's not much of a problem, since it's so small.
Also what no one is considering here is the ergonomy... Try putting your monitor flat on a table, and write a text document. I dare you. Your neck is going to go after less than half an hour. To be ergonomically viable, it'd have to come with a support, but then that would make typing difficult. I don't know what to make of it, really.
In fact, it seems the only people who can use it are the failed 30-something "I'm working on my movie script about New York!" douchebags who spend their time computer in lap at coffee shops, wasting away government resources with their unemployment and sick leave because of "hitting the wall":
Seriously, all the people who are using it in the screenshots and NOT typing with one finger like a retarded amputee monkey are supporting the thing in their lap.
500 dollars isn't expensive. That's what I paid for my netbook.