The new/revised MacBook Air would not compete on the same level as a consumer tablet communication/media device. While the original MBA could not perform well, the revised MBA has proven to be very capable of being a primary Mac for most Mac users. The revised MBA fills the need and power/performance of a Mac in true portable form.
The Apple version of a "netbook" will primarily serve as a communication and entertainment device. I believe the two can and will succeed together one being a premium ultra portable Mac that performs computing tasks for business professionals, executives, writers, students, tech enthusiasts, and all else who need a portable Mac computer. The tablet/netbook device will be coveted by consumers who primarily use it as an Apple product (not Mac computer). This device will be used for entertainment purposes as a video player, photo album, gaming device only better than iPhone, and the biggest reason it WILL happen is the success of the App Store for the iPhone/iPod Touch. In addition to serving the media needs, it will also be used for Internet browsing (although MUST solve Flash issue that has troubled iPhone). It will be used secondarily as a communication device for text/media messaging along with email. It will have a virtual keyboard which is because it will be a consumer device and not (primarily) a Mac.
I also believe the Quad-Core Mobile ARM processor would be absolutely PERFECT for this iPad or MediaPad or some are calling it a MacTouch. It will not fold open like a traditional notebook. It may or may not have a 3G data plan tied to it or may be available as an option. I think the reason it will probably NOT require a data plan because Apple is so good with wireless AND PRIMARILY because the App Store model best describes how Apple will make additional revenues by making the iPad happen.
Furthermore, while it may not come out until second half 2009 or later, I believe the focus of WWDC will be on the new devices software development.
Go Apple!