If you study how people live then you can better understand how technology can help them and what effect it will have on their lives. In order to design effective small wireless devices, you have to understand people. The devices are by their very nature Modal devices. So you are stuck with a modal design. In order to solve the puzzle you have to figure out which modes will best suit your Users.
Screen size has nothing to do with it.
Microsoft will just love it if that happens. A heterogeneous set of custom designed modal devices, designed using anthropology techniques to better fit your lifestyle. The reality is that a Palm form factor device is a two handed device which requires head down attention. You hold it in one hand and you wand it with the pencil with your other hand. That has its uses but it also has its problems A WAP Phone, on the other hand, is a one handed device.