I'll probably get grilled for this, but I fail to see any real reason for purchasing a netbook. In my opinion, they're just novelty. I have a friend who owns one and he has the most difficult time typing/reading his work, yet he refuses to admit that it's impractical for his purposes! OK, enough of that.
I'll agree that the netbook market is a very niche market that many people don't quite understand.
Why did a netbook appeal to me?
Value:
The thought of a crack on my sony TZ makes me cringe. Before my netbook, I would have to think twice about the necessity of bringing my laptop around. When I travel on leisure, I mostly just need a notebook to surf, email, and watch the occasional movie. I don't need to lug around my $1800+ laptop for that. The price of $3-400 is a price I can live with - not to mention the netbook I purchased, the dell Mini 9, is extremely rugged.
Ruggedness:
It uses an SSD. No moving parts and fast read speeds. My Mini 9 booted to windows much quicker than my quad core desktop does. The people who have used OSX on their minis reported it being extremely snappy as well.
It is fanless. Correct me if I am wrong, but the Dell Mini is the first laptop to be completely passively cooled. Silent - no hard drive spinning noise, no fans - and it never really got too warm even at load.
Because there are no moving parts and no fans - the chances that you will face a mechanical failure is close to zero. Bump it around or drop it while its reading a disk and it'll still work good as new.
Portability:
The screen size is small, but considering I spend alot of time in front of my 11.1" Sony which has a resolution of 1366x768 , the 9" screen wasn't bad at all. The size of the netbook I had - the Dell Mini 9, was astonishing. It was even smaller than my Sony TZ. It's about the same size as a hardcover novel and probably weighed less.