Crazy idea, for sure but that doesn't mean it would not work. The Powerbook Duo system was years ahead of its time. Now every PC notebook has a docking station of some sort.
In this case, for the iPhone, a "netbook shell" the size of the Sony Vaio-P would be perfect! Very pocketable, full keyboard control, potentially larger screen for Office-type apps. When the work is over, pull the iPhone from the shell and go about your day with all of your projects and information still at your fingertips. This idea is great!
And if it weren't for the failure of the never released Palm Foleo this might have a chance. The company REDFLY has copied the Foleo concept and mirrors WinMobile devices to a netbook style device. Good concept, limited execution.
So bring on the iPhone Duo Dock. I'd throw my $250-$300 for this.
The Case for the iPhone Duo Dock