Planning to install Windows 7 on your netbook, here's a couple tips

Since Windows 7 offers no real upgrade path from XP and you have to wipe out everything, the first thing I need to do is backup all the Zune music I purchased using my monthly 10 free song credits. I plan to use my external Maxtor 750 GB drive to transfer the music from the Wind to this drive and then back again after installing Windows 7. I do not use the Wind for photo editing or storage so there is really not much else I care about wiping out on the device. I also want to caution you that many services have a limited number of PCs you can use to manage devices and wiping out XP and installing Windows 7 will in most cases count as two separate computers. I have seen this with the Sony Reader desktop software, iTunes, and Zune Marketplace so make sure you go through and deauthorize your existing computer with all of these services before you wipe it clean.
I then plan to use a USB flash drive to install Windows 7 following Kevin's guidance on how to install Windows 7 on a netbook with no optical drive. I recommend you check out Sascha Segan's recent article on Five Key Tips for Installing Windows 7 on Netbooks, since he also mentions installing from a USB stick and troubles he had with this method and with using an external DVD drive.
If you buy a new netbook, you are most likely to find it loaded with Windows 7 Starter Edition and as pointed out on the Windows Team Blog there are a few limitations with this version compared to Home, Professional, and Ultimate. These include no support for Aero Glass, limited personalization of the desktop, no multi-monitor support, no DVD playback support out of the box, no XP mode, and no remote media streaming. For netbook users these may not be limitations at all and honestly I could probably live with them all as well. I do have a copy of Ultimate though so plan to try that out on the MSI Wind.
Have any readers installed Windows 7 on their netbook and if so, are you finding it is worth the upgrade from XP on these small notebooks?
UPDATE: I backed up all my files and then installed Windows 7 Ultimate on my MSI Wind via my USB DVD drive and it was a flawless and simple installation experience. I now have my Zune software up and running and am finishing up the Office 2007 install. So far it looks great on my MSI Wind U100 with 2GB of RAM.