For many years people have been talking about thin clients (or dumb terminals) becoming the norm for personal computing. If you could do everything on the web, you wouldn't need a local file system or bulky operating system. And to an extent there's certainly a trend in that direction with the recent advances in cloud computing, virtualization and of course Google's Chrome OS. On the other hand though, it's interesting to note what's going on in the complete opposite direction in the mobile phone market. With Google's announcement of the Nexus One yesterday, we're now able to carry around last decade's supercomputer in our pockets--the Nexus One has a 1 GHz processor, 512 MB of RAM, and 4 GB of storage expandable to 32 GB. Talk about fat clients!
Clearly, there's a reason why smartphones still need to be "fat," and that's because their cellular network connections are still glacially slow relative to cable and fiber. In most cases it's still much faster to be working on data stored locally on your smartphone rather than over the network (this is one reason why Apple's App Store has done so well).
So where is this all headed? The cloud computing platforms, as promising as they seem, leave a lot to be desired. There are still open questions about the security of massive virtual platforms and still no one has a very good answer about what happens when Amazon goes down. On the other hand, they're only going to get more reliable and more secure over time, and cellular networks are only going to get faster, so I think it's just a matter of time before smartphones start to look more like thin clients as well.