You can clean off a LOT of Windows bloatware and save quite a bit of room on a limited hard drive. I own an Asus eeepc, (the one that started all this mini netbook fuss), and it came with a 4gb drive. I deleted the Linux partition, and installed XP in its place, per the instructions Asus provided. By the time all was said and done, the scaled down Windows version loaded in less than 1gb of hard drive space.
To augment things, like Doug did, I also got a 250gb USB external drive. I also use 4gb USB thumb drives to store converted videos and DVDs, to watch via Windows Media Player on the PC. It provides plenty of good-enough video quality to watch a film on a flight or whatever, and the USB thumb drives use less power than the larger 250gb drive.
This mini PC will never replace a full-size computer, but armed with it and the shareware modem-conversion program for my spouse's PDA cell phone, (PDAnet from junefabrics.com) we have nearly broadband Internet access anywhere we can get a cell signal. It's perfect for looking up a restaurant in the car, surfing email and TUG while on the go, or while waiting in airports. It works very well for me, as long as I'm willing to accept the limitations.
Dave