It's a phone when I use it to make calls and sms.
It's a computer when I use it for web browsing, running linux apps, SSH-ing, VNC-ing, and debian-ing, and perhaps also hacking it a bit
It's a portable hard drive.
It's a ebook reader when I use it to read ebooks and edocs and enewspaper and comic strips
It's a gaming console when I use it to play FreeCiv, Battle of Westnoth, Heroes of Might and Magic II, Angband ....
It's a great notepad when I use Conboy to jot down quick notes or brainstorm or write journals.
It's a great organizer when I use it to organize my life with mGSD (and soon tbGTD) and expense with Siggy.
It's a good digital camera when I use it to take snapshots and shoot short videos.
It's a good portable media player when I use it to listen to music or radio and watch movies.
It's a workng alarm.
It's a funny remote controller.
It's a handy torch.
It's a paperweight (some day) or a brick (if I would lose control).

Conclusion: it's more than the sum of a phone and a computer.