I would consider this a "no brainer" personally.

Of course you wont be able to use the N900 as far away from you as the N800. Likewise I wouldn't expect to be able to read text on my 24" monitor from the same distance I can on my 42" TV. Logic should make it pretty clear that you will always need to get closer to a smaller screen, period. That does not mean its not a viable platform to use though.

There's a reason I plan to use my N900 mostly for IM/phone at home but still use the PC for prolonged web browsing. Even if everything fit perfectly on the screen its still more comfortable to use a larger screen.

The point is, can you lug that screen around in your pocket every time you leave the house? Personally I have enough junk in my pockets as it is I doubt I could fit anything much bigger than the N900 (although granted, 4" screen WOULD fit) in my pocket. It is exactly why I never use my PSP or original DS, they are too big to carry around with me.

I would love a bigger screen, around 4" as that wouldn't make a big difference to the device size. However from what I have seen of the N800 it looked HUGE and would be far too big to lug around for me. If I need a separate bag to put it in I might as well just lug my laptop around instead. The N900 is all about being able to have it on you at all times without it getting in the way.