jkOnTheRun has some info about how Intel defines the difference between netbooks and MIDs, along with some details about the future of these platforms:
There is constant confusion about terminology where netbooks, MIDs and UMPCs are concerned and Intel shared their internal definitions for these categories. They see netbooks as clamshell notebooks with a 7 - 10.2-inch screen that is "purpose built for Internet use". MIDs are pocketable devices with a 4 to 7-inch screen that take a clamshell, slider or tablet form and are custom built for "Internet-based targeted usages". These usages they define as productivity, entertainment, information or communications. They stated repeatedly that they believe MIDs will focus on one of these usage scenarios in a given device and be sold as a consumer product in stores.
The Atom processor will be the processor that Intel will continue to produce for both netbooks and MIDs. In 2009/ 2010 the next generation Atom, the Moorestown, will offer a 10x reduction in idle power consumption and add specific communications capabilities to aid in MID online performance. Intel plans to continue working with a lot of third party OEMs and ISVs to help bring MIDs to the mainstream where they think it will go. They have a strong backing for the Moblin Linux distribution and expect to see that become a major player in the MID arena.