Where are we going with these cheap, tiny PCs?

Word has it Dell is getting into the hot new thing: tiny PCs. These small, convenient if lacking small laptops are caputuring the hearts and minds of todays laptop maker. What is behind the bandwagon movement? Is it consumer preference or is it a fight to stay relevant?

The OLPC is the first I remember to promise a cheap machine that you could actually use. Their big push, buy one/give one went over well from what I hear and then was promptly discontinued. Now the effort focuses on the lofty and worthy goal of only supplying them to third world nations, not your brothers kids. But it was the OLPC that got me (and others) excited about the small size.