LifeHacker raises an interesting question of how popular a small laptop might be if it were to reach the $200 price point. Netbooks, such as the MSI Wind and the Eee PC, have small screens and limited horse power. But they do a lot, boot quickly, and are easy to carry in a book bag.
I've recently helped purchase an hundred of the MSI Winds for use by first graders. The small size and light weight make them ideal for small hands. If the price does reach $200 or less, I think many schools will ask the question: why not?
If you have not considered this new class of laptops, you probably should. What will be interesting to see is how the current low-end of full size laptops respond to the dropping of the prices on the netbooks. I think for first and second grade, I would prefer the netbook because of its form factor. But, if a full size laptop was $350, I would be very tempted to get it.