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Looks like it's already been covered an moving on to OS options, but I've been looking at netbooks for a while and have some fairly researched opinions. My biggest hangup with them is actually the amount of screen real estate - 800x480 or even 1024x600 is way too small to use for much, even web browsing feels cramped. Up to recently my top pick would be a configuration of the HP Mini 101 or 110: for about $350 it has basic Atom 270 processor but has an LED backlit 1366x768 display and a Broadcom media accelerator to play HD video, even Hulu with the newest Flash update.
I'm looking forward to the Asus Eee 1201N once it's out in the next month of two, even though it's up to $500. Dual core (still Atom) 330 processor, Win 7, 2GB RAM, high res display, plus an Ion graphics chipset for media acceleration. You can configure full laptops with similar specs, but it's small, and Atom+Ion has better battery life. Besides, I think the hardware video acceleration makes a bigger difference than a better processor at this point anyway. Other than full blown PC gaming, I don't think any more upgrades would make much difference for most people, except maybe adding a little more memory.
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