You're right about Netbooks. Microsoft were late to the game on that one. All the early ones were Linux - and still hugely popular too. Microsoft then had to heavily "subsidise" XP to even compete (there's a lot more to it than that but that was the essence of it).

Interestingly Apple said they had no interest in the Netbook market. They released the MacBook Air which had a roughly equivolent form factor but at a wildly different price point.