I have an Eee PC - and I have installed 'eeeXubuntu' on it (from
www.eeeuser.com). It is great, and brilliant for browsing the web, has wireless, webcam, can run skype etc (webcam works on Linux too).
Currently it is downloading a torrent file, and has a 60GB 2.5" HDD plugged into it. The lack of internal HDD space means you can't do big downloads but you can do everything else, can install the OS, etc.
By the way, buy the 4GB model, NOT the 2GB model. The 4GB model can be upgraded (mine has 2GB RAM and no swap space on the Solid-state drive), but the 2GB model has soldered-on-RAM.
The computer uses a very small amount of power, haven't yet got a kill-a-watt or the NZ equivalent, but still less than my 120W desktop replacement laptop
The keyboard takes getting used to, but after about 2 days, you can type on the smaller keyboard, or standard sized keyboard, with no problems.