Evolution, not Revolution
So, basically, we get a really nice ultralight notebook (with green construction and packaging) at a very reasonable price; AppleTV is cheaper and there's some content now (a lot of it, really), including HD; and there's an Airport with a hard disk built in to do wireless backups. And the iPhone SDK was mentioned ;-)
Not earthshaking, but not bad.
The really obvious flaw in the MacBook Air is the lack of some form of cellular network option (EVDO, WiMax, 3G, or whatever).
Another thing that's annoying people is the non-upgradeable RAM and the non-user-replaceable battery.
Frankly, I think the target audience (the kind of folks who have very expensive handbags and briefcases) won't care about this. The average Mac owner earns something like 25% more than the average PC owner, and this product definitely targets the upper end of that already spendy demographic.
Not the kind of product that will sell a lot of units in a recession, though.