AnandTech dedicated an article to Intel's upcoming Silverthorne processor. This chip will be used in the mobile Menlow platform for a new type of product called Mobile Internet Devices:
But Silverthorne is launching this year, soon in fact, and there are still many unanswered questions. We know from CES about the types of devices we'll see it used in. Intel calls these Mobile Internet Devices, or MIDs, they are small devices that can be used to browse the web, check email, use chat clients, play music, view photos, etc... These MIDs will either run Vista or Linux, the majority being Linux due to lower system requirements and cost.
They will all be significantly larger than an iPhone, but their intended use is also a bit more strenuous (in theory) than an iPhone. Since Silverthorne is an x86 microprocessor, these MIDs will be able to run virtually any x86 application. Intel is quick to point out that Silverthorne based MIDs will be able to run the "full Internet" including Flash, whereas the iPhone can't.
These MIDs won't double as cell phones, so you'll still need to carry one of those with you but the idea is that a MID will be with you instead of your laptop. It'll be a lighter, more functional device, with a much longer battery life. Think UMPC but actually useful.