The latest model, the Nokia N810 has just come out, with a sliding keyboard in the device (and yet, slimmer than this model), so this model has been reduced in price.
The browser is a complete PC browser, so can be used on hotmail, for e-commerce, and everything else you've ever used a browser for.
The biggest let-down of this device is that the wi-fi doesn't connect very easily sometimes; you sometimes have to go through some advanced settings to get it to talk to your setup, and sometimes, it just won't no matter how much you tweak it.
The new model includes a GPS receiver, and an updated operating system too, although Nokia are giving a free upgrade to the new operating system for all N800 owners.
This is a full Linux computer, capable of being expanded with two memory cards to have up to 16GB of memory/storage, which is great for a portable computer, but less so in these days of 120GB iPods.
A VGA-resolution camera in included in a clever pop-out on the side of the device, and it can rotate almost 360 degrees so you can use it to take pictures or as a web cam when using skype -- which is built-in to the new operating system, so yes, you can make phone calls to people if you are near a wi-fi hotspot. The Cloud is the country's largest network of hotspots, and costs approximately 5 pounds/month for unlimited access, so this could be a pretty cheap way of getting a phone, albeit one with limitations.
As pointed out elsewhere, the device does also have bluetooth, and will allow use of a mobile to connect to the 'net, offering a much better experience than on the phone itself (unless, of course, you have an iPhone).
The screen on this device is magnificent: 800x480 resolution makes it sharper and clearer than anything you've ever seen at this size: it's a shame that it doesn't look as gorgeous as the iPhone's interface, but for reading text and browsing, it's truly wonderful.
The price makes this a must-have device: an artist colleague loves using it as a portable sketchbook rather than carry lots of equipment around, and I use it as a network diagnostic tool as well as a general-purpose computer -- there are few devices that are so capable as to handle both of those requirements!
NetSlut