The netbook business is an odd one, really. As a product category, it's easy enough to describe: take a notebook computer, and start taking things out until you end up with something really small and really cheap. Optical drive? As long as you assume the consumer already has a full desktop or laptop somewhere with a CD/DVD drive, you don't need one. Full sized keyboard? Too big, give them something smaller. Top of the line CPU? Don't need it for basic web surfing and light editing. Tons of storage? This is an appliance, you don't need it to hold all of the user's media.
As a business, though, it turns out it's pretty dicey. It's just not possible to make much money on a $300 computer, no matter who you are. Some companies have done the math and decided that it doesn't make sense for them to be in the business. To be honest, though, the business model doesn't matter much to me -- that's up to computer companies to figure out, not me.
I bought Tammie a little Acer Aspire for her birthday last year. Of course, I probably use it more than she does. It arrived with Windows XP installed, and I'm pretty sure I had the hard drive reformatted within a half hour of unboxing. Yeah, I'm one of them.
I installed Ubuntu Netbook Remix, and it was OK. The machine was OK for running Firefox, but I had recurring issues: sometimes, the WiFi would just stop working for no reason, for example.
Overall, though, the netbook is still a toy; something to check the IMDb or Wikipedia on while sitting on the couch. It's a nicer toy than it was last week, though.
Only through hard work and perseverance can one truly suffer.