Scoble points to a topic on TabletPC Buzz where Layne Heiny asks whether the Tablet PC is dead.
Scoble's response? "[J]ust stick around and see if the Tablet PC is dead."
I can tell you first-hand that the Lonestar release (now part of SP2) is a huge step forward in terms of usability, and the SP1 Preview makes OneNote a truly killer app on the tablet. There are still things that will be improved - and I'm sure they're being worked on - but we're getting there.
One of the things that sold me on the tablet (I own a convertible) is the ability to use both the keyboard and the pen. As a result, I find I'm able to use a computer in situations I would never dream of before, increasing the total utility I get from my device. The fact of the matter is, I probably use the keyboard close to 75% of the time. At first glance, you might think that somehow suggests that the Tablet is a failure or bad - but it's quite the opposite. Because my total utility has gone up, that 25% of the time is really just the time I wouldn't be using a computer otherwise.
I think that's somethign a lot of non-Tablet users don't understand. In many ways, the separate branding hurts Tablet adoption - it becomes seen as an unnecessary feature. After all, they have Windows XP at home, so that's all they need on their computer - not this 'fancy' Windows XP Tablet PC Edition (especially when there's such a premium). As that premium goes away, I think this makes perfect sense from a marketing perspective - you effectively eliminate the psychological distinction.
In reality, I will consider the Tablet PC truly successful when it is not called a tablet anymore - but is just an expected feature, standard on all laptops.
There is every indication that this is the direction we are heading with Longhorn - and that's a good thing.