What a relief! There is a huge world outside of the USA with sensible networks.

And how do I put that in my pocket?

In Soviet Russia netbook pockets you!

Bzzt. Wrong.

The obstacles are:

1) Battery lifetime/power source, as you said.
2) pocketable/phone devices with enough CPU power and CPU compatibility with desktop apps
3) pocketable/phone devices with KVM capability

If your phone had enough CPU power to run the same apps as your desktop, and still keep enough battery life (through battery capacity and/or CPU efficiency), and you could plug it into your KVM switch, and/or into a docking shells/companion-devices that had the shape options of (slate-tablet, netbook, laptop, full-desktop), then you don't need "shape shifting" technology. You pick the shells/companion-devices that suit your needs, and go from there. 1 CPU/storage device for all use cases.

And, there are actually 2 other limits that will keep us from fully replacing desktops and laptops with this "one device":

4) storage density -- you'll always be able to put more and faster storage into larger devices. The best you can count on here is: having storage density improve enough that you don't _care_ about being able to store more at home.

To some extent, 2-4 can be off-set, somewhat, by moving applications and storage into the cloud. Which brings us to the 5th hurdle:

5) network ubiquity -- you can't displace the other factors with cloud storage, cloud computing, remote access to your home storage, etc., without an ever-present, affordable, broadband network. Don't count on that happening any time soon.

The big problem for devices like these will be when we evolve to have functional telepathy. Then all communications devices will be rendered obsolete. Imagine a Beowolf cluster of Einstein clones

I expect we'll have direct neural interfaces (DNI) (and thus a telepathic-like ability to communicate with our gadgets, wired and/or wireless) before we have real telepathy. That will help these devices, more than hurt them. No more keyboards at all -- just dictate via thought. Then the only things you'll worry/care about in device formfactor are:

screen size/resolution (assuming it doesn't have the ability to display via DNI as well)
battery life
CPU power/application compatibilty
WAN (type, affect on battery, etc.)

oh, and, probably security ... if not security of the device then security of the DNI.

Imagine a set of (sun)glasses, where the frame, arms, and strap behind the arms function as a non-invasive DNI (ie. a sensor grid, not a plug), and the glasses function as an augmented reality/HUD display, and there are ear-buds or earphones that connect to the arms. There would also be microphones in the frames, both for conversations and recordings, as well as noise cancellation and augmented reality/enhanced-hearing. There may also be 360 motion/optical sensors to help with proximity sensors around your body. Then you connect it (via wire or wireless USB or bluetooth) to a WWAN/PDA/phone gadget that you keep in your pocket. You'd control it through a combination of head tilt/orientation, voice, and brain activity. And, with the MIT finger-tip sensor UI, you could possibly add that to the control mechanisms.

great thinking ! we will assemble an army to battle them at once !