i call bullpucky
"... it's only a small jump to the desktop and Cupertino control over everything you do on your computer."
that last part is complete and utter shite, scaremongering "woooohhh, takeover, mind-control, gibber gibber" bull-hooey.
it's rather a large jump to the desktop, rather than such a small one, and one that Apple won't push for. they have their niches, and i can see this becoming a very big idea, especially as it would appear from all those rumours that the iPhone OS App Store applications will in all likely hood be accessible and runnable with no or little to no modification. In any case, this is not a device to replace the desktop, but it might just cannibalise low-cost laptop sales.
for those who don't have the memory of a goldfish, Apple did advise all cocoa programmers to make their applications to be screen size/scale agnostic a little under 3 years ago.
Since the iPad/iSlate/IDrool looks to be a beast of the same genus as the iphone, it could be comparable in terms of application usage... however the feature set of the device is not known, and how this feature set would affect the existing app store content, is anyones guess (except Apple who probably know a thing or two)
Now I have 3 computers in my house, 2 imacs and a plastic MacBook laptop. my laptop is basically a machine for couch surfing and email. It has no real function other than that (95% of the time), and it does it very well. It's cheap, has a good size screen, but is not very light. If the object of desire is lighter at the same price point as my laptop, then theres a very good chance I will get one purely for its weight characteristics alone, because I know it's going to do everything I want and probably a whole lot more in a more comfortable form factor.
Add to the fact that Apple will have some hook (for want of a better word) that will make the iSlate a cut above the competition (integration with other apple gear aside).
Imagine a Slate with USB, BT2.1 (with full A2DP) and Infrared, a MiniDisplayPort, AND an HDMI port. Connect it to your TV, to play some games, connect handsets (iPhones or Apple controllers wirelessly or over BT for multilayer). the Slate could be the new AppleTV, or it could fit in the middle as a bridge device.
whichever way, it's never going to replace a desktop, but it might just replace a laptop.