Well, Bovinicus, I guess I just felt like building it for fun. My main machine is a nice AthlonXP in a big Antec tower (chock full of fans and drives and such) and I felt like making something different for a change. This computer will be the opposite of my other one: small:big, slow:fast, quiet:loud, linux:windows, $300 budget:money-almost-no-object, etc. Also, this will give me an oppertunity to get familiar with Linux (I need to have windows on at least one computer, and I am tired of trying to get stuff to dual-boot), and the computer will be quite portable. In fact, I am thinking about figuring out how to hook a battery up to it and getting a few other things (such as a head-mounted display) and making it a wearable computer. It's just sort of a recreational experiment, I guess.
EDIT: I didn't quite answer your question. It's not that it NEEDS to be small, it's just that I felt like making it that way.