While The Veda concept is a fairly new idea out of Microsoft's R&D labs, the design itself looks as though it was picked out of a time capsule sealed in the mid 90's. Apparently, the Veda can be used as a phone when the screen is closed, as a multimedia player when the screen is open, and as a normal portable PC by opening the screen and extracting the keyboard. It also looks about the same size as a library dictionary.
The question here is: why the hell would anyone want to build such a device? Microsoft's justification for the project is that PCs can often do the same things that dedicated devices can do (like mobiles), but there is a learning curve involved :
User studies carried out on a number of users have shown that entertainment, communication and information retrieval are the three main motivating factors for people to use devices like a personal computer. However since a personal computer is a general purpose device, some amount of learning is associated with achieving the same task as compared to achieving the same task using a special purpose device like a telephone, a music player, or the like.
For example making a telephone call using a computer involves knowing what application is used on a computer to make a call, starting the application and figuring out how to use it using input devices attached to the computer like keyboard and mouse. Instead if the device had a hardware keypad that is normally used in a telephone, along with appropriate software then dialing a call would just involve pressing "Dial" button, followed by the numbers to be dialed on hardware keypad and the required software will come up and complete the call for the user. In this way the interaction of the user with the device would be the same as the interaction with a special purpose device for making a telephone call.