I tried to code on my 10" HP Mini 702ea, but issues with screen size and performance just made it impossible for application development. Maybe if I was doing scripting where I don't feel I need a full IDE, then perhaps it'd have been a better fit, but the IDE and VM environment I use just brought it to a halt.

So, in November I plumped for an HP Pavilion DM4 (http://www.engadget.com/2010/06/15/hp-pavilion-dm4-review/) which really hits the spot on every level. It looks nice, has a good keyboard (shame about the F-keys defaulting to the alternate functions like volume and screen brightness), decent battery life, but the most important thing for development is the basic raw power. It can quite comfortably run a few VMs and an IDE (I use VirtualBox and MonoDevelop).

It's also not that much bigger than a netbook.