Update 2: Taking questions now — Steve says that the iPhone could be considered an entrant into the netbook market, since it can browse the web (uh, sure), but that Apple’s looking at the "nascent" netbook market and it’s "got some interesting ideas there if it does evolve."
Update 3: Hitting harder on the price aspect of netbooks, Steve says, "We don’t know how to make a $500 machine that’s not a piece of junk, and our DNA won’t let us do it." He also says that he thinks Apple TV will remain a "hobby" in 2009, and totally shot down a question about touch / tablet computing.
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