I finally got to play with a netbook today, an Acer Aspire One running Windows XP with 1GB of RAM and a 160GB hard drive, and I was impressed. As a travel computer, it would do just about everything I, or most business or personal users, need. There wasn't a live WiFi connection in the store where I was trying the Acer out, so I couldn't test the computer's performance with streaming video, and there's no DVD drive, so I'd have to rip a DVD onto a USB flash drive if I wanted to watch a movie on an airplane. To me, those are relatively minor limitations.
The Aspire One that I was looking at was priced at $399. There were bigger notebooks with much larger screens and keyboards for a couple of hundred dollars more, but for my money, a computer like the Aspire One would be an ideal travel computer, far more cost-effective than either the Mac Book Air or Lenovo X300. The Aspire One and similar computers are so cheap that they're "sacrificial"; so long as you have a good backup solution, if they break, it's often cheaper to buy a new one than to get the existing one repaired.
All that said, I probably wouldn't want to edit a webpage or run Photoshop on a netbook, but that's not what they're designed for. For the kinds of things that you're likely to do when traveling, a netbook is fine.