I had purchased a EEE Pc few days back with Linux OS, later i changed it to XP. I also heard there's a tweaked XP OS in the market which is under 100 MB and perfect for EEE pc type of laptops.
Yeah, you can create your own slimmed down custom XP install disc using nLite. I personally don't see the point though - I'm running the standard ASUS install of XP on my 901 without any probs.