At the moment this isn't so much an "Ultra Mobile" PC as it is a "Massively Immovable" PC, but I'm sure when Digital Cube get round to making their actual UMPC it will be a little bit smaller. According to Steve they're looking for design feedback from potential users, so maybe they need that pointing out to them. It'll be based on an AMD Geode processor, a chip which has had mixed reception from UMPC buyers: some prefer the extended battery life possible from its miserly power requirements, whilst others would rather have extra grunt. Either way, they'll have more choice in the UMPC when the Digital Cube unit comes to market.
I'm assuming the "Smallest UMPC in the World" is ironic at the moment!
Digital Cube working on a UMPC[UMPC Portal]