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Some of Twitter's competitors have the timeline functionality that you describe, like Plurk. The problem there for me is that none/very few of the people I follow are using Plurk. Twitter is the leader in the clubhouse, as far as I'm concerned.
Something you might want to try is Socialthing! Aside from the way that it integrates various social networking services, it also has a different way of displaying updates that might be more to your liking. Not the timeline concept, but you'll easily be able to see what's been updated since your last login. They're in private beta (I can send you an invite), and have just been acquired by AOL.
Interesting. Well, as you say, plenty of Twitter's direct (and indirect) competitors have much more useful interfaces/APIs, but as long as Twitter has the lion's share of users it'll be hard to dislodge. For example, FriendFeed can do everything Twitter can, and much more, but outside of my geekiest friends nobody uses it (and if few people use *FriendFeed*, it's safe to say that almost nobody's using Plurk or any other competitors, either). And as long as all my friends are on Twitter, I will be, too.
So I guess my point is that Twitter is in a lucky position, because of the network effect of its critical mass of users, and now that they seem to have at least muffled the uptime problem I'm hoping they'll start addressing some of the more glaring interface problems. If they don't do it, and soon, I'm pretty sure Facebook is going to figure out a way to make its status feature as easy to use and ubiquitous as Twitter ever was.
I don't know anything about Socialthing, but if you can send me an invite I'll definitely check it out (calamityjake at gmail dot com). Thanks!