Basically Netpliance failed to identify a motivated target audience. They spent a lot of time and money attempting to pitch the i-opener to seniors. Unfortunately, the only crowd which has become excited by the unit's undeniably wonderful form factor are us -- specifically, young male hackers, mostly in our teens, 20s, and 30s, who intend to repurpose the hardware for use as a general purpose PC.
Second, the various pricing starts and stops, the ever-changing Terms of Service which have been issued basically in response to the hacker threat, and the company's many personnel changes certainly signify trouble at headquarters.
Bottom line: This is a company that doesn't manufacture hardware; instead, they've been drop-shipping units from Quanta Computer, a Taiwanese laptop manufacturer: http://www.quantatw.com. Moreover, Netpliance sells each unit at near-breakeven or at a loss, depending upon the price du jour. Netpliance is also a company that doesn't run its own internet service (they resell uu.net, I believe), so they don't even get to keep all the revenue from that. As a result, they really haven't yet discovered who in the hell they really are, who they're selling to, and, even worse, how they plan to make money.
Basically Netpliance is a reseller -- selling somebody else's hardware and internet service -- and they're not doing a very good job of it. My prediction: terrible Christmas selling season and out of business by February or March 2001. Don't get me wrong: I won't celebrate their misfortune. I'm all for Netpliance succeeding. I just don't have much confidence that they can succeed at this point.