I've had an Acer Aspire One for a few months now and really like it. This is an 8.9" screen with Windows XP. The downside to it is the keyboard is kind of small and I have big hands, but if I'm sitting at a proper desk it's not bad once you get used to it. I like the touchpad on it more than I like them on larger laptops but I also picked up a wireless mouse for it that works great.
If you are going to be doing a lot of typing on it then the Dell netbooks, especially the 10" version, have larger keys and are somewhat better for typing. I looked at the HP version and the keys on that were also of decent size but I didn't care for the layout of the board.
I've also looked at the EePC netbooks and they were fine but looked kind of toy-like and I didn't care for them for that reason. I think I paid somewhere around $350 for my Acer and that came with the larger battery and a wired USB mouse.
You can use Notepad or Wordpad out of the box with the Windows based netbooks but you could also download and install OpenOffice if you wanted. If you haven't heard of it it's basically an open source version of MS Office and the word processor is compatible with Word and other equivalent software.
The Acer has decent horsepower for what it is (1.6MHz Atom processor, 1GB memory, 160GB hard drive). I like MS Office so I installed Office 2003. I also installed GIMP and IrfanView for quick photo editing and an FTP client and FrontPage for website updates. I updated my Imperial Holocron website from the floor of Wizard World Philly this year with it, worked like a charm. The wireless network card has really good range.
The nice thing about the Acer is that it has 3 USB ports, built-in wireless and wired network cards and a multi-card reader. I popped my camera's SD card into the Acer to upload photos for that web update I mentioned. The Acer also has headphone and mic jacks, monitor out and a webcam. Oh, and with the wireless network running, and the upgraded battery, I easily get 5 hours of use out of it before it needs a recharge.