I actually think it'll go the opposite way.

My hunch is that as the general public becomes more technically savvy, and storage devices get smaller, you'll actually wind up carrying your entire computational environment everywhere with you, operating system, applications, data, and all, on a little flash-drive-like thing about the size of a credit card.

You can actually do this today, if you're mildly geeky - a 2 gig flash drive and a lightweight Linux distro leaves you plenty of room to do most of your daily activities, and you can use it on any fairly recent Intel machine. (though we'll need to do something about those boot times...)

So anyway, I'd expect to see a standard terminal appear, which is probably an x86 piece of hardware, that boots off your little data cartridge, and you go on your merry way.

This has the advantage of the net-based computing paradigm - your personal setup and applications, everywhere you go. It doesn't have the massive problems of net-based computing, like completely losing access to your data when a fiber-seeking backhoe takes out your net connection.

Yeah, it would be pretty easy to lose your data, by losing the card, but there'll always be online backup services, like Apple's .Mac, and creating a backup that's not online wouldn't be too hard either. Encryption probably becomes more important, since if you lose this little storage device, someone else could probably break into it easily.