I just submitted a paper(44K PDF) to a workshop on situated ubiquitous computing at Ubicomp 2005 in September. I just submitted it minutes ago, so it's hot off the presses and may be totally off-base, but I figured I'd share it anyway. Here's the abstract:
The assumption that the goal of ubicomp is to make technology disappear stems from a Modernist ideal of purely utilitarian design that creates social invisibility. In fact, everyday design is anything from invisible, as can be seen in how furniture and cars are designed and from the hotrod and casemod cultures that modify everyday technological objects. Ubicomp design can learn to understand the design of situated technology from industrial design and from the study of technology modification cultures.
In other words: the way that people choose and modify technology is testament to the fact that they're not interested in having that technology be solely in the background. Understanding the boundaries of choice and the directions in which modification progresses may help us understand how to make ubiquitous computing that feels natural, without necessarily trying to make it invisible.