I use both. The iPaq does a pretty good job for quick notes while out and about, and Excel and Word on it are pretty capable. Reading files for info is fine; inputting any significant amount is a pain.
The laptop isn't too practical when in the car (not driving, I hasten to add), but in a hotel room or on a train, the laptop has it all the way.
I saw one of those little "palmtop PCs" - it looked brilliant, but I've not played with one so can't say if it does the job of a "full-size" laptop.