@drillersmum,
To answer the "no operating system" idea... again this phrase is a bit misleading. Every computer device has an operating system of one kind or another.
But the operating system can be designed to only do one thing... you could design a computer device that would only be an internet browser. This is an interesting idea since probably 95% of what normal people (non tech geeks) do on the computer is done through an internet browser-- and as has already been said, there are all kinds of services (some free and some for pay) from Able2know, to Googles word processor that are being offered over the internet using only a web browser.
There is a new trend of companies specifically limiting things you can do on their devices. In my opinion, this is a bad thing. Apple is selling what are really hand held computers... the hardware has lots of capabilities.
Apple is intentionally limiting these capabilities-- in fact it costs them money to make their computing devices (such as the ipod) less useful.
There is some claim that the control that this gives Apple over the devices they have sold allows them to ensure a consistent user experience that makes them easier to use. Many of this think this is hogwash... Apple really wants a monopoly on user experience that will mean more profits from a captive audience.
On the other hand, some users want a device that only does one thing with no complication. The reading devices (Kindle, Nook and the Sony reader) are examples of this... the devices are designed for one thing only. They access the internet (and are really examples of cloud computing in the way they access content), but they only do a very limited set of things for a singular purpose.