I've configured a triple-boot on my Samsung N120 netbook - Windows XP (came with), Windows 7 and Ubuntu 10.04.
While I mainly use Windows 7 on my desktop PC, it is very sluggish on the netbook, way much more so than Windows XP, despite upgrading its RAM to 2GB. One thing I can agree on is that if you use Windows 7 on an Atom based netbook, the performance will probably put you off using a netbook, never mind the features crippled in the starter edition.
Windows XP Home runs quite well and even boots pretty quick - 40 seconds between powering on and on the desktop ready to use. The main thing to watch out for is that some virus checkers bog down the system, especially McAfee, which many netbook makers preinstall. Get rid of McAfee and install the Windows Security Essentials and that will likely make a very noticeable improvement.
If you are willing to learn how to work in the Gnome GUI in Linux, the Ubuntu is by far the smoothest running on the netbook and gives the impression of working on a more powerful laptop. I originally had the Asus EEE 7" running PCLinuxOS and didn't really notice any issue with speed. However, that OS was like Windows ME for stability, regularly giving driver issues. Ubuntu occasionally hangs on boot, geting stuck with a flashing cursor just before the logon screen, but other than that, it seems to run fine once booted.
If Microsoft is happy to make people think twice of buying a netbook, I'm sure Apple will be happy getting a few more iPad owners.