It's a below-average computer in an above-average case.
By no means is it a crappy computer... it's decent. But for its price you could get a really great desktop, or a beefed-up regular MacBook. What you're really paying for here is the beauty, and the precision-engineered design. It is pretty much the most gorgeous laptop on the market.
Basically, if you want to have a good, fast, high-performance laptop, buy a regular Macbook with all the bells and whistles instead. If you want a really sexy-looking, lightweight, thin laptop, the Air is for you.