Why not make a docking station for the iphone. (I saw it on a blog a while ago but I think it was just photoshopped or something)
So it's a screen and a keyboard, and your iphone pops in somewhere for the guts of the computer. You even use the iPhone screen as the touch mouse. I bet people might pay 300 or even 400 for that.
I think what you saw was a patent application, and while the drawings were of a laptop-sized device fitting into an iMac-sized device, an iPhone-scale system would be more likely to see the light of day.
I'm wouldn't hold my breath, though. How large a display can the iPhone/iPod drive? How to justify the cost for something that is not a primary computer? What happens to your phone functionality? What about the accelerometer? What about rotation, as most apps are designed for vertical orientation? Wouldn't using the mouse as an input device be redundant? Would emulating touch control with the mouse (like the simulator) be adequate? Wouldn't it be cheaper to just add Bluetooth HID support and hang a magnifying glass in front of it? Etc, etc.
So it's a screen and a keyboard, and your iphone pops in somewhere for the guts of the computer. You even use the iPhone screen as the touch mouse. I bet people might pay 300 or even 400 for that.