The iPod is only REALLY a big hit because you don't need to use a Mac to use an iPod. Subnotebooks are entirely different monsters - they're FOR using OS X.
Sadly people still regard Mac OS as a simplified "candy" operating system without programs they require. And in many ways, they're right.
The iPod was always going to go well. It provided the public with a device that they'd wanted, and they made it work exactly how it should, and look good, which noone else had done.
Notebooks, PDAs, it's all a horrible mess.
Think about it, with PDAs, what OS will it run? All the PDA software is either on Palm OS or Windows CE. If Apple produces another operating system for it, it'll be bought only by Apple owners. So the 3% of people that use Apples will now be divided again to around 0.2% of people who would actually need a PDA and don't already have one they're happy with. AND they'd need to convince people to completely rework their software for Newton OS X

. It's just not economically viable.
Instead, Apple needs to have a BARE BONES system, desktop or portable. Doesn't matter. All in one preferably, one FW port for an iPod, one or two USB ports for keyboard. Modem. 15" CRT screen. CD-ROM drive. 500 MHz G4 processor. 10GB HDD.
BARE BONES. As long as it looks nice, people will buy it, and the G4 will do OS X justice. I wouldn't buy one, but it's what people have begged for so much recently