Thin Clients - a.k.a. "dumb terminals" have a long history in computing, and tend to come up every few years (seems to be a ten year cycle) as the Grand Solution to Desktop Computing, promising mind-numbingly easy centralized configuration and software maintenance, simplified licensing, and low-cost, low-profile desktop terminals that provide enough power for almost all users without wasting resources.
With the current interest in low-cost computing devices like the OLPC XO among many others, the World Bank's InfoDev group have put out a short thought piece on thin client computing and the developing world, with a new twist - OS virtualization:
The Macedonian Government’s “Computer for every student” initiative chose a solution based on “desktop virtualization” where the computer power of each PC is shared by seven students, each of whom has their own screen, keyboard, mouse and virtual desktop. The solution, provided by nComputing, a US company, works out at US$70 per student “seat” (excluding monitor etc) and runs open source software using LINUX. The advantages for the schools include the low initial capital costs, but also a reduced budget for electricity, air conditioning, maintenance and training. When the system needs upgrading, the costs are less than 15 per cent of what would have accrued if a PC had been supplied to every student.
Virtualization provides a much richer experience than most thin client interfaces, so it's possible that this trend will finally catch on as a longer-term approach to lowering the cost of 1:1 computing programs, especially when using open source, per-seat-license-cost-free solutions like Linux-based desktops.
For a fascinating look into the potential power of virtualization as a tool (in this case, as a web and database server component, paired with cloud computing) check out Codepad.org's Steven Hazel discussing some server-ninja working with scaling Codepad through virtual servers.
A parting thought - remote desktop works surprisingly well from OLPC XOs. Their high resolution makes up for their small screen size (if you have good close-up vision, at least!); so it's not impossible to see them as a thin client low-cost hardware solution; where you can enjoy many benefits of the OLPC's rugged design but also leverage a centrally managed desktop + software solution, with an "offline" mode of Sugar (or Ubuntu/XFCE...)