...Some people want a small, cheap, portable computer as a second or third computer. Most people buying netbooks already have a computer anyway....
In a down economy, sales of cheap laptops are up. Netbooks aren't being sold to people who can't afford a $600 laptop. They're going to people who want them as a second or third computer. Among people I know on a budget, 100% of them would rather get a full-featured laptop for $600 than a netbook running linux with a 8" screen for $400.
I have never found standard laptops at all plesant to use. 15" and even 17" screens are just tiny--especially widescreen versions. I am now used to using dual 20" LCDs at work, and a 32" LCD at home hardly seems large (though the pixels do). Yet even small 15" notebooks aren't very portable either.
The NEC Mobile Pro 900C I bought last year works fine as my portable system. I hardly ever use the optical drive on my desktop systems. I even thought about getting a INOi Media Tank thing (External USB 5.25" + 3.5" + flash reader) and using my Mobile Pro as my main system. Unfortunately, the old NEC is limited to the slowest USB read speed and can only display 640x240 on an external monitor.
ASUS Eee PC 700, NEC Mobile Pro 900C, HP Jornada 720
Despite being smaller than the smallest netbook, the 900C uses all of its 9.69" of width for a decent keyboard. The tiny keys were the biggest weakness of the first Eee PCs, but there are finally some netbooks with decent keyboards. Now for $350 I can get an Acer Aspire One with x86 Windows, 1 GB or memory, and 120 GB of drive space. These netbooks easily lose their size limitations when plugged into a big LCD and a normal keyboard/mouse. The Intel GMA 950 may fail at gaming, but at least it has a nice 400MHz RAMDAC that can drive up to 2048x1536@75Hz, and it can run both Aero and Quartz Extreme.
So exactly what feature is missing?
eSATA, but USB 2.0 is okay.
DVI-type port, but VGA is okay.
Coming from my Mobile Pro, I would also like a touch screen and a Compact Flash slot (which my camera also uses). $600 laptops don't have these features. $1000 laptops have nothing better than crappy 8600GT level 3D performance. Such low end specifications are even found on the "new" $2500 MacBook Pro. I'll pass.
I am currently thinking of selling the Mobile Pro (which seems to be worth more now than when I bought it) and getting either an Acer Aspire One or ASUS Eee PC 1000HA. The ASUS looks to be better except for the right shift key size and placement. Both units have somewhat noisy fans and 5400 rpm harddrives. One review noted the Eee PC 1000H uses up to 44 W peak load / 18 W idle, which isn't great.
I am also feeling more positive about Intel Atom performance. Evidently it is possible to overclock these netbooks to 2 GHz through software, and the Atom seems to compare similarly to ULV Core Solos. Now If we could just somehow plug a $50 Geforce 9600 GSO into a netbook...