I use a 6 year old ASUS convertible tablet to do development on while on my train commute. A train is much more stable than a bus so the motion related issues the other mentioned is almost a non-issue. Motion related issues vary from person to person so you may or may not get nauseous.
Technically, if you want to use the WP8 emulator on Windows 8, you need to make sure the laptop you use supports SLAT (Second Level Address Translation). If not, it won't run the emulator and you would need to either use an external physical phone, or restrict your testing to the WP7 emulator which doesn't require SLAT.
The WP app I'm working on requires a lot of DSP, so one thing I've done is share the same DSP *.cs files between two projects, one that targets WP8, the other that targets a simple WinForms app. This way I can work on my DSP algorithms without requiring either an emulator or a physical WP device. This allows me to use the full laptop/desktop screen to display detailed debugging graphs etc. It also allows me to use my custom made Debugger Visualizers that don't work for WP development at all (I really wish MS would fix this). For instance I have one visualizer that can take a buffer of floats or doubles and display the audio waveform in a zoomable/scrollable popup window. But this approach is probably only possible for a small amount of app types where you can separate out the internal functionality into an external app. A good argument for MVVM.