I owned the original Air when it first came out and I've used the upgraded MacBook Air 13" at work. I really liked it and thought the screen was perfect. So why not just get that computer. Well for one I'm kind of cheap and the 11" is just a tad cheaper. The other thing is this is going to be my vacation computer and I don't really want to lug more than I need. In fact I mostly use my iPad on vacation now but there are still times you need a computer.
Anyway, I took a chance and I've been perfectly happy with the 11". I haven't taken it on vacation yet and since I just started a new job I probably won't be taking many vacations any time soon.
The 11" Air is small enough for my wife to put in her purse. Now it's a big purse so I guess it's not that impressive but the main point is that I don't think the 13" Air would have fit. The speed of the system is fine. I don't tend to crunch huge spreadsheets or render massive 3D graphics on this computer...or any computer for that matter but the speed has been fine. I've actually played Civ V on it and it worked even though the Civ V reqs say it shouldn't. You don't get any fancy effects like clouds and stuff but it played. I also have Parallels running Windows 7 on it too and it also works well.
Anyway, in my opinion the MacBook Air 11" is fine. And remember I have bifocals so my eyes aren't that good and it's still fine for me. Definitely go to an Apple Store to check it out before you buy.