No 3G though? I guess when you're only willing to spend $200, it's not worth it?
Am a bit surprised they didn't do some sort of "instant tethering" feature: tap your phone and tablet, they pick up over NFC and negotiate the config automatically.
Without a modem Google controls 100% of the user's experience, with a modem they're subject to the whims of AT&T, Verizon, et al.
I'd be very, very happy if Google wrested some control back, it might mean sane support and updates for future Android devices.
Just because my PC came with a modem 15 years ago didn't mean I was tied to AOL, Compuserve or the local ISP. I gasp bought my service from whoever I wanted.
Yes, a cell modem would add more to the cost, but a contract free 7" google-updated android tablet with 3g that I could use on multiple carriers, unlocked... what's not to like about that?
You do realize that there were laws protecting your right and ability to do that?
Before this, you could only hook in an AT&T phone into the jack, and you had to rent that from AT&T.
Cell carriers each have slightly differing radio frequencies. They would have to sell "Works with AT&T", "Works with Sprint", "Works with T-Mobile" versions all separately, as they all use different radio frequencies.
The alternative is to build a mega-radio (or perhaps cluster of radios) to support all the carriers, but that adds weight and significant cost, and won't work with whatever new carrier comes out tomorrow anyway.
No, you only need two versions: "Works with all GSM carriers" (with frequencies to support 3G/4G on AT&T, T-Mobile, and almost every other carrier in the world) and "Works with all CDMA carriers" (Sprint, Verizon, etc). And for a first pass, you can ignore the latter entirely.
At this point, most decent smartphones come with a quad-band or pentaband radio.
It is only recently that you can find penta-band UMTS phones that gives you 3G on GSM providers in all the continents.
Back when the Nexus One came out, it was $579 to buy it outright, or $179/$279 to buy with a 2-year contract (depending on if you were an existing customer or not). Buy on contract, cancel, pay the $200 cancellation fee, and just then you're already $200/$100 ahead. Then consider you have 24 months on a plan that costs $20 less each month than it would under contract, and that's $480 saved, not to mention the freedom of not being tied to a carrier for those two years if you do decide you want to move.
And as a bonus, T-Mo is very tether-friendly. They'll throttle you if you transfer more than some amount of data per month (which I've found to be a non-issue in my personal use), but otherwise they don't care what you do with the data connection.
If I had not received a Galaxy Nexus for free at Google I/O, I would have likely purchased a device for $350 from Google and then activated it on Red Pocket or some other GSM MVNO.
It's important to realize that often, prices like $600 for a smartphone are deliberately inflated for the sake of encouraging people to sign their money away on cell phone contracts. This is illustrated by the fact that the Galaxy Nexus, a relatively high-end device, is available absolutely unsubsidized, for $350.
If you are amongst those who miss 3G in $device then check them out now, you might be in for a pleasant surprise.
(personally I have a huawei 585 and can recommend it wholeheartedly, it's even smaller than the MiFis!)
edit: you need to check if your mobile carrier allows you to do it
I'm really glad it comes with GPS. If I do get it, it is because they decided to include the GPS chip. I travel a lot and having GPS on a larger screen can help when talking to taxi drivers.