There seems to be quite a bit of confusion regarding just what a "notebook" actually is when talking about the differences between them and laptops in general. Where netbooks were born only a few years ago and have clearly separate design aspects, notebooks and laptops have been around for decades, with so many similarities between them that some have begun to believe that the terms are one in the same. Thanks to this, the two terms are often used as synonyms today, with no regard to their differing historical meanings.
The term "notebook" was coined around 1989 to describe emerging lines of smaller laptops that were about the size of a typical A4 paper notebook. The first two to fit the original label were the NEC UltraLite notebooks and the Compaq LTE line of systems, with the IBM ThinkPad arriving a couple of years later to really popularize the form factor. Laptops before then (and many since) were usually wider, taller, and thicker, with the laptops of today being so to fit extra goodies into the system, increase airflow to cool really powerful processors, or to simply have a larger, eye catching screen (or all of the above, as the case sometimes is).
For years after this initial introduction, the term "notebook" was common vernacular for these smaller laptops, which became really popular among businessmen and students for their light weight and more discreet size. The reduced size, however, came with a price.
Notebooks essentially traded ease of use and comfort for raw processing power, as the smaller portables generally contain weaker, more power efficient chips within their framework. This created a slight segmentation of the market, as notebooks made good companions but poor replacements for desktops, whereas the more powerful laptops can equal all but the most powerful desktops on the market. This remains somewhat true even today, years after notebooks have lost their original A4 size in favor of physical sizes that make them more or less indistinguishable to the more general laptops.
This means, of course, that notebooks are now situated between laptops and netbooks in terms of processing power and general usage. Where netbooks are the extreme in portability and low prices, they are also the lowest denominator in regards to processing power and storage space. Unlike netbooks, notebooks are not specifically designed just for office use and surfing the Net - they can perform almost every task that laptops and desktops can.
With notebooks and laptops converging and becoming increasingly similar, it is possible that very soon there will not be any difference between the two at all.
In closing, we would like to mention that there is one distinction between laptops and notebooks that is actually increasing at the present time: touchscreen functionality. At present, the percentage of notebooks with a built in touchscreen is rising quite rapidly. While there are laptops with touchscreen support, the function is, at least for the moment, a notebook thing.
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