Netbooks can do almost anything
For a student or even office worker, a netbook can do almost anything. I have XP on Acer 150 with Office 2007 so I can work on almost any kind of document needed. I even have Visual Studio 2008 installed and it works perfectly fine for doing software development.
For entertainment, I can easily play any mpeg4/divx/xvid file without any problems. You can hook up external speakers easily enough if you'd like some good volume. Or, get a USB sound card if you want good stereo. The only time I ever see a stutter is if I'm trying to play over wireless. The hard drive (160gb) is large enough to put all my music and favorite videos on. And if I want more space, I can always attach external drives.
If I want to sit down and do some real work, I can very quickly plug in a USB keyboard/mouse and a 24" monitor. Close the lid on the netbook and work as if it's a desktop. The 1.66Ghz Atom processor in this thing is still faster than the last Dell laptop I had from work.
Apple really missed the boat on this one. There is no reason a student shouldn't get a netbook instead. Mine was only $400CDN and the best purchase I ever made.