has posted information on the limitations Microsoft put on netbook manufacturers when it comes to Windows XP.

The limitations:

SSD cannot be bigger than 16GB. Hard Disk cannot be larger than 160GB.
Graphic engine cannot support anything better than DirectX 9.
System RAM cannot be more than 1GB.
The processor has to be single core unless it is one of the following:
Intel Atom (N270, N230, Z500, Z510, Z520, Z530, Z540); or Intel Celeron 220; or AMD Geode LX, Athlon (2650e, Sempron 210U); or VIA C7-M (ULV), Neon (U2300, U2400, and U2500) CPU.

There are also some limitations related to the display size of the netbook. This is probably to block manufacturers from offering Windows XP on regular laptops and notebook models.