The one thing that prevents me from replacing my 13" MBPro with a new MBA is the 4Gb memory limit. I know it's only a matter of time before they up it to 8. When they do...I'm sold.
Try it. You might be surprised.
I have to admit, though, choosing the 11" didn't come easily. I knew I wanted it for its compactness, but I was convinced the screen would be too small.
Do yourself the favor and challenge your assumptions. Go play with it. Especially play with it using Lion and its full-screen mode for apps like Safari and Mail. This is where the Air really shines.
To me the only benefit to the 13" is the larger battery. Otherwise the 11" is perfect.
The 11" screen isn't really a hindrance for me at all, IMO - either in Xcode or Photoshop or IntelliJ OS X or when in Visual Studio on Windows.