In my other comment I mentioned I actually owned Palm IIIc circa 2000. I didn't mean it was useless, just that it would not catch on with the general public until they merged into what we call smartphone today. I'm sure it was mostly just business and legal reasons such an integration did not occur earlier and Palm did start selling an integrated device very shortly afterward.
Today I use a iPhone 3G that is increasingly useless because of apple's lack of support yet continued updates, which I can't upgrade because its under a corporate contract, and a standard size laptop. I never feel the need for something inbetween because I either want contacts/emails/calendar on the go, or something that can do some real work in excel.