I have an Acer Aspire One Netbook that has 1Gb RAM and 120Gb hard drive. It has a 1.6 GHz N270 Atom processor, and came with Linux Linpus Lite preinstalled.
I took off the Linux and installed Vista Ultimate, and it runs like a dream. It's obviously not as fast as a desktop or laptop, but you don't use these machines for intensive computing - mobile internet access, email, and a few data files is all most people need.
My little Acer is a delight, it's small and light, and the build quality is high. The real winner however, is its display. It has an 8.9" screen on which the display is crystal clear and bright - it's astonishingly good.