ASUS announced the Padfone quite a while back but it weren't taken too seriously. They brought it to MWC with them and well that has changed, sites have accepted the idea and TechCrunch has a great post on it here.
I personally like my phone and tablet to be two separate devices but I know many absolutely love the idea of being able to blend the two together. This is the market ASUS are targeting. However it doesn't just do phone and tablet, it even does netbook. You can now get a keyboard dock for the thing.
The phone itself is the main driver of the whole system. Of course ASUS have chosen ICS as the main OS to run across both phone and tablet. And with ICS having the great intelligence to change from phone to tablet OS by screen resolution, as soon as you stick the phone into the tablet at the top, the tablet will turn into the fully fledged ICS tablet OS. The tablet has the basic 10.1-inch HD display (1280x720). The Padfone will feature a 1.5Ghz dual-core (should have been quad-core) a whopping 64GB of internal storage and all the rest you would expect. You will also still be able to use the camera while the phone is in the tablet, with the convenient hole in the case.
I got to say this is a very crazy but at the same time amazing device which will match the needs of a lot of hardcore geeks and nerds out there. It's something which is very different from anything other mobile manufacturers have got to offer. The only thing ASUS have to get right is the pricing. In the UK, a high end smartphone and tablet will set you back around £800-£1200. Not many people have got that kind of cash to blow all at once, they would rather blow it slowly over a year or so, because it don't make you feel bad you've spent so much cash.