If it's the most important thing he's ever done then it has to be a paradigm shift.
A touch tablet running OS X and OS X apps but a custom UI is the pinnacle of all Apple's development to date IMO.
Touch is the most natural of interactions between people and machines. The iphone is like second nature:
Mac OS X is the ultimate in OS development - strict unix compliance with a simple UI and enough flexibility to run whatever software you like.
I can see reasons for going with ARM + Tegra though. I have a funny feeling that multi-core ARM will be faster and more efficient than Atom and cheaper too. Initial benchmarking indicates this:
dual 500MHz ARM no GPU keeps up well with a 1.6GHz Atom. There's no reason why Apple couldn't have dual 1GHz or 2GHz processors alongside Tegra and 2GB RAM. It does cut out legacy app support but it would be faster than netbooks and possibly around the same price.
As long as there are enough substantial apps to make it worthwhile buying, it could be a great platform. As you say though, we'll just have to wait and see what happens. The App Store apps presently available are not good enough and published content isn't enough as you can get it on the iphone (Stanza is a superb app). Movies are best viewed on a bigger than 10" screen.
Even if it's not the desktop Mac OS we know, a desktop-like experience will have to be on offer.