In the videos released by Gizmodo and then Engadget, the Courier seemed to be in its final stages of development, but it appears, at least from an outsider's view, that Ballmer does not want to directly compete with the iPad, and eventually the HP Slate or Dell Streak.
Adds Microsoft Corporate VP of Communications Frank Shaw: "At any given time, we're looking at new ideas, investigating, testing, incubating them. It's in our DNA to develop new form factors and natural user interfaces to foster productivity and creativity. The Courier project is an example of this type of effort. It will be evaluated for use in future offerings, but we have no plans to build such a device at this time."
The device would have been under an inch thick, weigh about 1.3 pounds, and be 5x7 when closed. The device was built on the Tegra 2 chip, and ran on Windows CE 6/Windows Phone 7.
You can check some of the preview videos: