I think Dvorak has this right:

These phones are still a little weak for word processing and full docking capability. By that I mean the phone should be dockable, but not into another computer -- into a simple dock that attaches a keyboard and screen. The smartphone should have enough power to run the software it has as full-blown application software. Combined with some nifty cloud applications and remote storage, these phones should give people enough to get by. In fact, the newer processor chips coming out for the smartphone will deliver a lot of computing power.

It would be nice to be able to hook an iPhone up to an LCD screen and keyboard, and have it function as a fullblown system. I suspect that kind of capability will arrive soon - certainly Google would be happy to see the g-phone used that way along with a suite of Google cloud apps :)