I'm writing this post on a very small, cheap laptop. There seems to be a trend, more companies are realizing the potential demand for these sorts of things. I think the OLPC XO has something to do with that, but there's a topic for another post. The “subnotebook” I'm using is the Asus EeePC, but there are a number of others out or coming out, from vendors such as Everex and Dell.
Because of the small form factor, they tend to have smaller-than-normal keyboards, but I find them easy to get used to, and certainly better then trying to type on a PDA or iPod Touch. The screens are also fairly small, but usable.
The other attractive part about these ULPCs is price. There are some very expensive ones, but for the most part they are $300 to $500. Which, in my opinion, is the most you should spend on a laptop. If you're looking for a portable computer, particularly to supplement a desktop back home, I recommend a cheap subnotebook.