iTablet's niche

The wild speculation about a supposed "iTablet" from Apple has been unable to even suggest a fitting market niche for the rumored product.  It could be a Kindle-like reader, a large iPhone for watching movies, a netbook replacement, or a combination of the above.  The real question (beyond whether this product even exists) isn't what the specs are, but what operating system it would run.

A custom version of OSX would make the tablet more like a lightweight computer, that can run regular programs and handle almost any type of file.  Processor power, hard drive space, and RAM would likely prevent it from running intense graphic, art, 3D model or video editing programs such as CAD or Creative Suite programs.  Because of limits to screen size, hard drive capacity, and processor ability, modifications to the OS would be likely such as removal of Expose, and perhaps even a streamlined window system.  Obviously, UI elements such as touch and accelerometer input would also be required.  A screen imbeded full-size touch keyboard would also be an important part of the interface.  Supported video, music, photos and written info could be accessed through an interface similar to Apple's Front Row, itself like a large iPod system.

On the other hand, Apple could create an entirely new OS, just like they did for the iPhone, which might better utilize the power, touch interface, and size of the new product.  This might have a home page like the iPhone, and a series of pages or menus for reaching other apps or functions.  Other minor changes would include custom apps (bigger games, tablet as pen interface, etc.)  However, considering that many might find a 3G network connection too expensive to have one for their laptop as well as their phone, this would handicap the iTablet, making it only slightly more than an iPod Touch with a larger screen/interface.

What I'm hoping for, and considering the significant downside of the latter scenario, the likely situation, is that Apple finds a way to create an iPhone-like interface, that can still run traditional Mac programs, such as Microsoft Office, Google Earth, and perhaps even Aperture, Rhino or Photoshop Elements.  While hardware restrictions are likely to preclude running process-intense programs or games, especially with large files, and the Tablet OS would restrict multi-program workflows, ideally it would still allow traditional file management, and downloading and installation of universal programs.  This would be in addition to new functions, such as using the tablet as a wireless tether, adjunct screen or input element for your regular desktop or laptop Mac.