The internet is all-a-twitter with rumors of an Apple tablet. Frankly, like others, I am of the opinion that the tablet already exists in some prototype fashion within Apple and never released because of the so-far lack luster market. Unlike them, however, I do think that there is a market out there for this sort of device, even outside of the "professional" computing world environment that they cite, such as doctors and sales reps.
Having owned an iPod touch for several weeks, it has become my go-to device for web surfing and quick tasks. The thick-fingered-centric design of the touchscreen is really very satisfying to use, and would only get better with increasing size. One example application would be music. How cool would a touchscreen mixer board (GarageBand anyone?) be? Or for great DJ effects at a party, like virtual record scratching. Finger Painting. Awesome renditions of boardgames. Or totally new game designs, like the DS rendition of Zelda. Give it a kick stand and prop it up to view movies. Or better yet a dock and stand with keyboard and mouse to drop the tablet into.
Business applications are also pretty amendable to such a device, namely my idea of bench-top LIMS input devices. Experience with the Touch also lead me to believe that note taking, brain storming, and diagramming would be greatly enhanced, or at least as easy, as regular laptops.
But before I get my own hopes and dreams up any further, I stick with the "I'll believe it when I see it."