The key to netbooks is knowing what they can do well and can't. The main use of a netbook is for cloud computing. This is using remote processing instead of local (Google docs instead of MS Office for example). The processors and RAM of a netbook are a lower spec than a laptop or PC. They are very good at tasks that are not processor intensive like surfing the net and using net based applications (hence the net in netbook).
If you are going to be doing photo editing with Photoshop, music editing, or even a lot of application based computing you may find that a netbook is lacking in power. This is especially true with a lot of applications opened.
The biggest mistake is thinking a netbook is just a small laptop, that would be an ultra portable. They are great machines and I am not trying to talk you out of one but it is important to get the right tool for the job. If the netbook isn't the right tool the cheap price won't make up for it.
As for specific models the three factors are size, price, and the OS. I like Linux so I would go Ubuntu. If you are not comfortable with Linux I would wait for the Windows 7 netbooks to ship this fall. XP, while decent, is shoe horned into netbooks where Windows 7 has versions designed for them. Price speaks for itself but size can be an issue. A small keyboard could be a problem if you have larger hands or a condition like arthritis. Go try out a netbook like the one you are looking at to make sure you don't cramp up on your second line of text.