Microsoft has apparently decided to lift
their artificial limit on storage capacity for Windows XP installed on a netbook, bringing the allowed capacity up to 160GB from 80GB. The move is in response to demand for greater capacity, which vendors believe will result in better sales. Pricing differences between netbooks with different capacity HDD are expected to be minimal. Both MSI and Asustek already have 160GB models planned, and Microsoft's decision may have been affected by that as well.
Netbooks running Linux do not suffer from this artificial limitation, but the Windows XP versions have proven to be more popular. Some say the demand for more storage space isn't as great as the demand for more CPU horsepower is on netbooks, though the latter could very quickly erode the “power-advantage” that netbooks have.