From a Business Week cover story about the X300's development:
Hill's other idea was to make the PC very small, less than 10 inches across and less than one inch thick. Yet he wanted it to have a full-size keyboard, so he dusted off a design from the mid-1990s: a keyboard that folded up when the laptop was closed and opened out to full size when the machine was opened. The "butterfly" keyboard had caused a sensation when it was first introduced on a ThinkPad in 1995. ... During a meeting at Sapper's modernistic, V-shaped home on Italy's Lake Como, the 75-year-old design legend urged Hill to make the fold-out keyboard deploy automatically, rather than requiring the owner to snap it into place. By midsummer, Hill handed his ideas over to the Yamato engineers to see what would really work.
A 10-inch sub-notebook with an automatically expanding fold-out keyboard? I don't know if it would have seen better sales, but it sounds awfully neat. Perhaps a bit too anachronistic.
Building the Perfect Laptop [BusinessWeek]