I recently read (again) a post on AMD blog "Netbook vs Notebook". It's almost embarassing how AMD tries to argue against netbooks. Actually AMD is almost forced to do it, why? Because they don't have a suitable netbook processor (yet?).
Intel developed Atom from scratch with power and cost in mind. AMD with Neo and the upcoming Conesus (a dual core Neo) are stripped versions of existing processors, AMD won't be able to compete with Atom for price and power consumption if they don't make a major development step (as for Intel's Atom).
AMD Neo and Conesus compete (if at all) with the new Intel CULV, actually Intel CULV processors got an edge on power consumption and performance. These are processors for notebooks/mini laptops with a staring price of 500 dollars, not less.
Coming back to the AMD post, I do agree on the fact that some % of people buy a netbook thinking to get mainstream notebook performance. On the other hand it is also true that many people buy a netbook because of the low price and small size.
Actually I personally define a netbook as a mini laptop with a price tag of max 400 USD, much smaller than typical notebooks and with enough battery juice (minum 4 hours). Of course I don't expect performance from a netbook, I just want to do some casual internet surfing, emails, that's it. This is what most of the people buying a netbook want.