For those who haven't heard, Michael Arrington of TechCrunch wants to build his own TabletPC Spec...
I’m tired of waiting - I want a dead simple and dirt cheap touch screen web tablet to surf the web. Nothing fancy like the Dell latitude XT, which costs $2,500. Just a Macbook Air-thin touch screen machine that runs Firefox and possibly Skype on top of a Linux kernel. It doesn’t exist today, and as far as we can tell no one is creating one. So let’s design it, build a few and then open source the specs so anyone can create them.
Here’s the basic idea: The machine is as thin as possible, runs low end hardware and has a single button for powering it on and off, headphone jacks, a built in camera for video, low end speakers, and a microphone. It will have Wifi, maybe one USB port, a built in battery, half a Gigabyte of RAM, a 4-Gigabyte solid state hard drive. Data input is primarily through an iPhone-like touch screen keyboard. It runs on linux and Firefox. It would be great to have it be built entirely on open source hardware, but including Skype for VOIP and video calls may be a nice touch, too.
I wasn't planning to post on this because I don't want to endorse the idea that a great product can be produced by 
"Crowdsourcing". But as I was laying down to go to bed tonight I couldn't help but think on the problem and I realized pretty quickly that what he's describing is simply an iPod Touch.
Think about it, the Touch is capable of some pretty high end 3D Graphics which means its easily capable of supporting 2D at a higher resolution (as would be required by the TechCrunch Tablet). Beyond that all the other requirements are identical. Touch Screen, Camera, Solid State Memory, etc... He basically just wants an iPod Touch with a bigger screen and some plastic molding to wrap around it.
Given the above, we already have a price breakdown provided by Gizmodo...
The 8GB iPod Touch has these major component costs:
Flash Memory: $32
(by Toshiba)
Video-Audio Chip: $13
(by Samsung)
Other Memory: $12
(by Samsung)
Touch Screen: $44
(Broadcom - controller chip , Texas Instruments - video driver chip, STMicroelectronics- motion reorientation)
(Balda, Wintex, and Optrex do touch portions)
(while Epson, Toshiba Matsushita Display Technology, and Sharp Electronics can all handle the LCD portion)
Total Component Costs (we know this doesn't add up): $147, about 50% of the retail price, which is standard for iPods.
You would need a bigger screen which would cost more but companies like ELO use Capacitive Touch Screens at normal monitor sizes so the components exist and are being manufactured in bulk right now. Given that, on a theoretical level, this would be a pretty easy design.
That being said, the logical minded part of me would like to point out that hardware design is an extremely difficult discipline that requires well trained engineers. You can't "Crowdsource" your way to an actual design because there are just too many factors involved in the design of consumer electronics. Things like components' relative heat, airflow through the device, circuit board design, and so on are all things that an actual engineer has to sit down and think through.
If that process was easy than you'd see new iPods every few months. But it isn't. So while I'm happy to play along with the mental exercise of this I think someone needs to point out that there's no way this effort can produce an actual working device unless TechCrunch is willing to pay an electrical engineer to design it and even then it would be hard to find someone talented enough to pull it off.
The reason Apple's industrial design skills are so admired is because what they do is no where close to easy.
Addendum: On the screen, the best I could find pricing wise was from this article on the TouchScreen XO-2. Here's the quote...
“We applaud the idea, but the cost road map makes it impractical in the next two years,” says Andrew Hsu, Synaptics’ manager of technical marketing and strategic partnerships. “Right now the cost of two 8-in. resistive screens would run around $16, which at a $75 retail price, overwhelms the bottom dollar.”
So it is, in theory, possible to get into the price range Mr. Arrington wanted if the screen isn't multi-touch.