Alternative to MIT's Cheap-ass Laptop

According to the NYTimes, Microsoft is proposing a computer disguised as a mobile phone. The phone would be connected to a television and keyboard for functionality. I like the direction, as cell-phones growing increasingly prevelant. However, I think the problems faced are the same. These cell-phones would not be the sexy Nokias that people lust over. I'm sure these would be remeniscent of the Zach Morris (of Saved By the Bell fame) phones of the early 90s.

The article mentioned mesh-networks as a means of sharing internet connections. MIT's N. Negroponte proposed this as a reasonable alternative to dedicated connections. I'm not sure how extensively they tested this, but with cell-phone technology, this could be a great acheivement if figured in to the Microsoft push for mobile computers. I do see a problem in cell technology in developing nations, something that must be fairly evident: where are the towers?