i have tested windows xp, other livecd distros, vista and win 7(with weird results) under pclinux
i also have used it on win xp to virtualize trixbox(a linux distro to create virtual ip phone lines) and to virtualize xp and other linux distros in livecd
this is a atom 455 at 1.66 ghz(hiperthreading, 2 fake cores) and with 1 gb of ddr2 ram
remember that a atom is nothing different to a normal cpu but using a lot less power
it is basically the same as my amd semprom 2600, you can compare it to a old pentium 4 at 1800
while running xp on the virtual machines i found it usable, the distros i tested if didn't asked for much ram, were usable
the host os on xp remained usable considering the conditions of use, two word processors, some pdfs, two web browsers and inside the virtual machine other stuff
this will heat the machine so put it on a table, not on your lap or it will overheat, i know this is a atom but i have managed to get it to 52º C. on windows and in linux to 55º C.
i am considering to change the 1 gb module and put a 2gb module in it, the biggest limitation is ram, remember that the ram slot will only accept a 2 gb module and it only has one ram slot
i would run pclinux and virtualize xp giving it 368 mbs of ram, maybe 512, if you have 2 gbs of ram give it 768mbs to the virtual machine
kde4 inside a virtual machine without 1 gb of ram, won't be useful if it works
about xp or windows 7, remember that the oem license that comes with the machine cannot be used for virtualization, you won't be able to activate it, you will need to use a retail version of those os so you can activate
i am dualbooting this netbook with xp oem home ulpc and pclinux with kde4