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I am 100% against getting a netbook. It's better to get another cheap laptop.
The screen is too small, the keyboard for long fast typing (As in notes) is inadequate. Forget about drawing with a mouse or mousepad something quickly.

If you can give some more money, get a tablet pc/laptop. Hell, even an ipad would be better.

I used a netbook for a few months both as main pc and as a way to take notes in a class (university) and it sucked at both. I had a MSI U100 clone.
Either use the money elsewhere or give more money for a tablet pc or cheap laptop.
Netbooks are a waste of money.

If you go ahead and buy a netbook (strongly suggest against it), make sure it has a long battery life because most do not, and if you want to play games between classes, forget about it unless you only have 1-2 classes per day.
I use a Samsung N130 to write my PhD thesis, it was deliberately bought for the long battery life (~6hr when screen brightness is lowered) and low price (£230 here in the UK). Since I'm writing in LaTeX, I don't need anything too fancy. It also does do Office etc and the more basic games on the GOG catalogue (i.e. pre-2000) all fine.

The main thing with a computer is "does it do what you want it to do?" If you want to play lots of GOG's more modern games (e.g. Two Worlds) or writing several hundred-page essays in MS Word then a netbook isn't going to work. If you're writing lecture notes, or a bigger document in LaTeX whilst playing Cannon Fodder, then it's ace :)
Dell Inspiron Mini's are good, I've played The Longest Journey on mine. It gives up on something slightly more complex, e.g. mine won't run Back to the Future, but they probably run most games on GOG barring things like Prince of Persia and Beyond Good and Evil.

You can get this for $300
http://www.amazon.com/Dell-Inspiron-4034CLB-Netbook-Clear/dp/B004EWEZJC/ref=sr_1_32?ie=UTF8&qid=1295446429&sr=8-32

Considering it's advertised on Amazon somewhere else for $30 more, it's a steal (250gb hard disk, 1.66ghz processor, 1mb RAM)
I've had an EEE PC 900 for, oh, two years now. I bought it from woot.com for something like $150. First thing you do with an EEE PC is strip off the default OS (some terrible port of Mandriva. Or at least it used to be) and and something like PuppEEE or EEEbuntu to it. Once you get a tiny linux distro on an old netbook, they work wonderfully well. It boots up in 18 seconds, has something like 4 hours of battery life even now, and though the keys are small, I can manage about 85 wpm on it.

If you're just looking for something small and convenient for taking notes, I'd recommend one of these. If you can find 'em refurbed, they'll be less than a hundred bucks now. Spend the rest on movies and nice dinners or something. :P

Of course, if you want a fancier computer, many of the recommendations on this thread are solid, too.
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TheEnigmaticT: Of course, if you want a fancier computer, many of the recommendations on this thread are solid, too.
I agree. While I was skeptical when these netbooks first appeared, the top models are really powering up and threatening the cheaper laptops; while the first netbooks have become so inexpensive they have become more than just a gadget..
I predict that in 2 years netbooks will sell more annually than laptops.
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Joppelarius: I predict that in 2 years netbooks will sell more annually than laptops.
Tablets--the iPad in particular--have been playing merry hash with the sales of netbooks this last 18 months. I guess we'll see which method of casual computing triumphs in the end.
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TheEnigmaticT: Tablets--the iPad in particular--have been playing merry hash with the sales of netbooks this last 18 months. I guess we'll see which method of casual computing triumphs in the end.
I guess it will depend on what most people want it for as to which will win through. While I think that tablets aren't going to disappear from the market any time soon, they're still a bit of a fad at the moment. I don't think that current sales will hold.
Based on some suggestions, I went to Fry's and took a look at some of the Tablet offerings they had. Not much. They had ones at $150, $250, and $450, the highest model being the Viewsonic G Tab. They also had a Samsung Galaxy Tab but I'm not spending $700 for a Verizon tablet. It was easy to use all these different models since they were all Android based, but TBH, I have an Android based phone, and while it is awesome to use for a phone, I can't imagine using it in class to take notes. It's just not designed for it. Same goes for the iPad, it's fun to use and browse the web with but as far as note taking goes, it's not very practical.
First off, I thank everyone for their suggestions! After reading some suggestions and doing some research, I was going to get an Asus EeePC 10 inch netbook, until I got a $250 check from my last job that I was apparently due. That bumped up my price range significantly, so I just picked up this:

Asus 12.1 EeePC with Ion 2 and dual core

$500 is a pretty nice price for it, and there is actually another student in one of my classes who has it and said it was amazing.