They have usb3 and thunderbolt for expansion.
You can connect (mini) displayport through the thunderbolt ports. You can also convert thunderbolt to dvi, vga, hdmi, firewire 400/800, ethernet, usb2/3 etc. with a $29 dongle. You can also daisy chain thunderbolt devices. As far as expandability goes, everything will be external. You'll just need to plunk down $10,000 or whatever the hell it will cost to max out everything from the getgo.
Very cool design. Design is what Apple is good at. They make nice products, and everything works and plays well together - as long as it is all from Apple.
They have optimized the design for their product, which will look cool in product photos and in the show room - but the expansion is, as you mention above, all through connectors. This means cables everywhere, connected to a bunch of devices (external HD's, DVD readers/burners, etc), many will have to be plugged into their own power. If you expand this thing much, I envision a spyder web of cords and cables and a handful of devices cluttering the workspace. So, in the end, is a cool looking and small CPU with a bunch of cables and external devices sitting around the workspace better or worse than the current big and clunky MacPro with everything self-contained within for the most part.