Just read this article about new flash hard drives from Intel.
I really like the idea of putting the OS on a flash drive, reminds me of the days when you had eproms that held the monitor programs for your machine which would start it up. Of course these machines were programmed in machine language so they didn't have the OS requirements of todays modern machines have.
The sizes are supposed to range right now from 1-8gb, which should be enough to put a base OS on, but the thing that really surprised (and impressed me) is the price. They are actually going to be $20-25.
How long before they've got the technology improved to provide the higher capacities that we expect out of our hard drives now. I would estimate 5-7 years considering Moore's law, but things have leapfrogged in the past, especially as new manufacturing processes are developed.
I could also see these being used in the $100 laptop (well actually $200 I think) due to their reliability and speed.