I use MBA (4GB RAM upgrade, 128GB SSD) for doing a lot of XCode development. XCode4 runs very smoothly and I've never had any speed issues with running the iOS Simulator. It's light, doesn't heat up, and is very stable. I gave up my http://chir.ag/stuff/5lcd.jpg setup for a single MBA and I couldn't be happier (my electric bill went down by $125/month). From personal experience I know that I'm more productive on 5 LC…
I'm the only one in our company not using any external monitors. The added screen real estate would be nice, but the downside is that then you have a different setup in the office and on the road. I rather get used to a single screen I always have with me.
I have co-workers who are the exact opposite; 3 or 4 screens, it's never enough, but I just feel like it's not necessary for me any more. You can only look at one thing at a time. Whether switching your view between monitors, or switching between programs, it's basically the same thing - the difference is, I can do the latter anywhere, and be just as productive in a coffee shop or on a plane.
Exceptions would be monitoring a large number of logs, or programs that require large GUIs (Photoshop, music sequencers). There, screen real estate is important. But for programming? Not for me.