Software Appliances on your iPod?

There's been a lot of hype about software appliances - basically pre-packaged applications which provide a fully encapsulated, targetted solution. Some of them have the advantages of reducing testing by packaging a tested operating system, libraries, necessary middleware (e.g. the version of Java that *works* with the application), and all the appropriate configuration files so that the applications "just works". Another use of software appliances is the use of a full system that you can carry with you, plug into any computer, "boot" your image, and use all of your normal applications, data files, etc. This solution from moka5 seems to be in the latter camp, where you can put your entire personal image on a USB key, or, more fun, on your iPod, carry it anywhere, boot from it on your friend's PC, etc.

I believe there will be some move that allows your personal PDA, phone, iPod, whatever to be your home image, allowing you the ability to use a larger display, keyboard, etc. whereever you happen to be, but without requiring you to carry the bulk of a laptop. And, with configurations like VPN's, personal apps, email, you can carry your world in your shirt pocket or purse.