UPDATE: As of February 15, John Gruber has a good analysis of why the MacBook Air is likely to be a big success. My wife (who fits into his typical purchaser category) really wants one despite loving her smaller 12" iBook, but is likely to wait until the 1.0 bugs are worked out.
Apple's new MacBook Air is, as usual and expected, a pretty sexy laptop computer. It'll sell well. But those who've been waiting two years for a replacement for the 12-inch PowerBook or iBook, it may not be quite the thing.
My wife has a 12-inch iBook, and I know several people who still hold on to their little PowerBooks, because up till now the regular-size MacBook like I have is bigger than they'd prefer. The thing is, not many people in the 12" laptop camp think the old MacBook is too thick—they think it's too wide, and the new MacBook Air is exactly the same width (32.5 cm) and depth (22.7 cm). Sure, it's almost a kilogram lighter and close to half the thickness, so it's easier to carry, but the MacBook Air isn't really a subnotebook computer.
It has other limitations too, aside from the lack of FireWire, CD/DVD drive, analog audio in, or included wired Ethernet. While the battery life is surely impressive (especially if you spring the extra $1000 for the solid-state disk instead of the regular hard drive), you can't swap out the battery at all: it's sealed inside, like an iPod's. Since batteries are one of the first things to wear out in a laptop, it's good that Apple will swap a new one for just the price of the battery, no installation fee, but if you're on the road and would normally swap in a new battery during a long day without a power plug, you're out of luck.
So if you like thin and light and sexy and agree with Apple that (a) widescreen is still the way to go but (b) it would be cool if you could slide it into a manila envelope, then this is the computer for you. If you want genuinely small like its old PowerBook and iBook predecessors, perhaps not.
Oh, and what's with the $100 price premium in Canada, and more cost for the solid-state disk too? (The external optical drive is $100 in both the U.S. and Canada.) It's 2008, Apple, the Year of Dollar Parity!