The Economist has an interesting article on the decisions you need to make when choosing a netbook computer. It is suggested that you use the bundled tuned operating system based on the Linux kernel.
By attempting to use MS Windows on the small, cheap netbook you need increasing amounts of resources such as more memory and a traditional hard disk drive. The cost of these upgrades increases the price of the netbook in line with a cheap notebook computer. Unfortunately the netbook's performance will suffer from having less memory and a cut-down processor.