I use an older 9 inch Eee PC. For $170 off of woot, it's been real good. I actually liked it enough that I got rid of my desktop and this is my sole computer now. I do tons of development on it. I installed a lightweight Linux distro (Arch) and am running a lightweight, minimalistic DE (stumpwm). I found that the default KDE3 was too heavy, but with my customizations I have almost no lags in development (all of my development is for web apps written in Chicken Scheme). I like to work out in the sticks (in areas you can't get to by car) so this works out real good.

If you need to use development environments heavier than emacs/vim, than you may need something more powerful.