I bought an Asus EEE-PC 701 a while back for my wife to use and it came with Windows XP installed on it. While it was useful for her to browse the web/IM there wasnt much else she could do with it without having to purchase additional software ( Email Programs / Office / Finance / Games / etc)
We decided to install Ubuntu on it instead to get a better selection of programs available. I found the following guide extremely helpful in getting everything working: http://wiki.eeeuser.com/getting_ubuntu_8.04_to_work_perfectly
** I was having a problem installing Ubuntu 8.04 from an external USB CDROM Drive. At about 35 - 36% into the file copy, it I would get:
"The installer encountered an error copying files to the hard disk:
[Errno 5] Input/output error"
I checked the CDROM for defects and it passed. Tried it a couple of times again with still no luck. I ended up creating a usb flashdrive installation using the following software and it finally worked. http://unetbootin.sourceforge.net/
BTW: I found this afterwards and may be a good option as well. http://eeebuntu.org/