>>> The solution: FlatStack. A little hybrid integrated circuit,
    >>> with complete TCPIP/PPP/UDP/HTTP/POP3/SMTP protocol suite based
    >>> on an 8 bit RISC core and some ASIC.

    Did I also miss this answer.  This sounds to good, I need to see this to
    believe this.  Can someone satisfy my sarcasm?

Um, this would be trivial (well, at least "not particularly interesting")
assuming that the "FlatStack" is something like a megAVR or one of those
newer 8x51 derivatives with a whopping amount of code storage.  Implementing
that sort of code in 128k or even 64k of memory shoudn't be too hard.  (for
example, NCSA telnet 2.3 for the PC is "only" about 200k, and that includes
things like a tektronix terminal emulator.  The "mini" telnet is only 93k.
(Um, that probably includes SLIP but not PPP, come to think of it.))

The interesting question is price...

BillW