Why was Smalltalk designed and built?
The Smalltalk programming language was developed at Xerox PARC in the early 1970s to give computer users (including children) a chance to use digital computers as a medium for personal expression and a means to "handle virtually all of its owner's information-related needs." The developers of Smalltalk designed it to be the interface for a planned notebook-sized personal computer that they called "the Dynabook" (the mock-up of which looks quite similar to the Apple II, which went into production shortly thereafter).
What features of Smalltalk were essential for its environment?
The Dynabook was designed to be "a dynamic medium for creative thought." Its interface, then, had to be instantly responsive to user input, so that the creative moment would not be lost; and simple and "natural" to use, so that anyone could become comfortable with using it.
Beyond these basics were the abilities that Smalltalk had to have to make it enticing to use rather than being merely "blah." It had to be able to display graphics at an acceptable resolution and with a variety of colors, and be able to easily accept user input to alter graphics and colors. It had to have a variety of typefaces and text styles in order to express moods in writing, and allow the user to easily edit and re-arrange that writing. It had to be able to process and output digital sound that had reasonable fidelity to analog sound.
Kay and Goldberg wrote that "one of the goals of the Dynabook's design is not to be worse than paper in any important way." This sums up the essential features of Smalltalk: It had to be at least the equal of its alternatives in every important way.
What is meant by "computer as active metamedium"?
The developers of Smalltalk were interested in the potential of digital computers to simulate the various media of communication: text, art, sound, video. As Kay and Goldberg wrote, "the computer, viewed as a medium itself, can be all other media if the embedding and viewing methods are sufficiently well provided." Because the computer would therefore serve as a medium for other media, Kay and Goldberg called it a "metamedium."
In addition to its versatility, the digital computer had one other advantage over other media of communication: its interactivity. "[The computer] can respond to queries and experiments -- so that messages may involve the learner in a two-way conversation." Kay and Goldberg denoted this quality as "active."
The "computer as active metamedium," then, means that the computer is a medium of communication through which other media can be both simulated and manipulated.
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