Strictly speaking, NetPCs don't fit into thin-client networking, because NetPCs aren't necessarily thin clients. Microsoft's first public response to network computing was that network computing was a dumb idea, that thin-client machines lost too much functionality to be viable alternatives to PCs. When Microsoft realized that support for centralized administration and centralized applications wasn't a bad idea, the company, in cooperation with Compaq, Dell, HP, and Intel, developed the NetPC standard.
This standard is Windowscentric (requiring Windows NT or Windows 9x on the client side) and aims to reduce the amount of necessary or possible local configuration. Rather than being an attempt to reduce client hardware and software complexity (as network computers—NCs—and Windows terminals do) the NetPC standard centralizes desktop control. Vendors designed NetPCs to let processing take place wherever necessary—either completely on the server side, completely on the client side, or in some combination thereof. NetPCs are like NCs in their support for a centrally defined desktop, and in their restrictive hardware configurations.
In fact, the NetPC is the Windows 2000 (Win2K) network's client. The goal of reducing total cost of ownership (TCO) defines the NetPC—not streamlined hardware or a small OS. On the software side, NetPCs support distributed installation of applications with remote configuration via Systems Management Server (SMS) and Zero Administration for Windows (ZAW). On the hardware side, NetPCs need configuration (to support Plug and Play—PnP), but they're also almost impossible to configure because of their sealed cases and lack of expansion slots. A NetPC might support an external device such as a CD-ROM or disk drive, but you can't add devices with 1390 Firewire or a Universal Serial Bus (USB) to a NetPC.