A. Many newer netbooks are now supplied with Windows 7 Starter edition, which is the most basic version of Windows 7, and it runs great. I tried running Windows 7 Ultimate on my Asus netbook and I had no problems—I even had the Aero interface fully functioning. Obviously, if you try to run graphically intensive applications, they'll perform poorly on an Atom processor, but basic functions work great, far better than the same hardware running Windows Vista Ultimate (which I also tried).
I recommend bumping up the netbook's memory from 1GB to 2GB if possible.