If we mean a computer that has everything on the motherboard rather than cards, is fairly small, then I think such a machine could be a good idea. Whilst having the expandibility and flexibility of cards is good, it does tend to make computers rather large. There seems to be a huge gulf between tiny laptops and huge towers. Arguably the reason is because you don't need anything in between - you either want something on the move, or if it's in your house you don't care how much space it takes up. I probably wouldn't want one myself, but things that might appeal to a more mainstream set of people are worth considering (in a similar vein, I think the iMac is an awful style of computer, but it was clearly a good move for Apple).
I'd rather avoid the exact style of the A1200. One example of small computers I liked the look of was the older Macs: you still had detachable keyboard (and monitor), but the main computer was still a fairly small pizza-style box. The main worry I always have with keyboards built in is spilling drink over an expensive computer;) With laptops you have to accept that risk, but with a desktop, you at least have a little more space. On a similar note, I dislike the way that Commodore tried to trim down space - eg, 2.5" IDE drives when 3.5" ones were so much cheaper, or chopping the numeric keypad off the A600. If you want to make a laptop-size computer *then damn well make a proper one*. Otherwise, enjoy the flexibility of making a small computer, but one with enough room to use the cheaper components, and not have to cut too much out.
If we mean also a low end machine, then perhaps, but I'd hate to see a repeat of the mistakes of the past of concentrating too much on low end machines. Also the climate is different now - PCs that are still very powerful can be had very cheaply, and there's plenty of competition from consoles.
