On whether or not Apple will introduce a cheap computer, Jobs was clear.
I don't think this has much to do with being unable to make a cheap, quality computer, but more with not being willing to. Such a cheap Mac would cannibalise sales of the current, pricier Macs, which wouldn't be good for the company. Of course, such a cheap Mac may have an additive value, but it would be a gamble. The basic premise here is that Apple is more interested in offering more for the same price, instead of offering the same for a lower price.
On netbooks, Jobs explained:
Jobs is probably right on the netbook market being small, but claiming that the iPhone fits into the netbook category is - dare I say it - idiotic. A netbook is a full-fledged computer, with hyperthreading Atom processors running at 1.6Ghz, with dual-core Atoms on the way. They can also pack lots of RAM, and they're capable of running even demanding operating systems like Vista (and some even install Mac OS X on these machines). On top of that, they have a lot of features that the iPhone doesn't have. Flash, large screens, normal web browsers, copy and paste, oh, and a keyboard. Modern netbooks like the Acer Aspire One, MSI Wind, and the Dell Mini are pretty powerful and versatile machine, much more so than the iPhone.
As for cellular connectivity - some netbooks come with 3G built-in, and at least here in The Netherlands, all mobile operators offer unlimited 3G sim-only data plans for as low as EUR 19.95 a month, with a free 3G USB modem (EUR 9.95 for limited data plans).
I am a bit of a netbook fanboy though (I wouldn't trade in my Aspire One for 10 iPhones), so take my opinion on this one with a grain of salt (if you weren't already doing that anyway, that is).
Jobs did leave the door open, though, for a future Apple nebook. "But we'll wait and see how that nascent category evolves, and we have got some pretty interesting ideas if it does evolve."