screen-only interface and form factor, like the Sony LocationFree TVs, except done right
runs full OS X, just on an under-powered G4, so a bunch of heavy duty apps like Photoshop won’t necessarily run well
Airport and Bluetooth built-in
stylus interface; attach Apple Bluetooth keyboard and mouse if you want direct input
it’s a remote for your "main" iTunes/iPhoto system
What’s the target? Basically, even-smaller-form factor plus remote control of other systems plus remote viewing (iPhoto, movies)/listening around the house. I could see myself using it in meetings etc. — easy/quick "on the go" note taking where tablets excel.
It also "solves" the problem of the 10-foot interface: give people a 1 foot interface to control their 10-ft interfaces with. It’s elegant, sneaky, and a very "Apple" thing to do. TV remains TV, OS X remains OS X…you just get the best of both worlds.
What would be a real coup? If you could use it with iTunes for Windows…
P.S. If I’m wrong on this one <acronym title="Steve Jobs, who we all know reads this blog">SJ</acronym>, I still think it would be a good one to build.