They're definitely more suited to headless operations, I have two old Atom netbooks and both were much better running Ubuntu Server. One of them -- one of the earlier Atoms that only had hyperthreading and originally ran Windows XP -- was a print server for several years. (Until the fan became grindy and the keyboard stopped registering input due to 24/7 operation with the lid closed)

With Windows -- either XP Home or 7 Starter -- they both barely chugged along, not to mention battery life.