Well, can netbooks do everything laptops can? In a word, no. But then they do things in a slightly different way to laptops because they are made specifically to be portable. This means that they are smaller and much lighter than a typical laptop, and their size means that they cannot hold an optical drive bay like a laptop, so you won't be able to play CDs or record DVDs on a netbook. But in a way, that's the whole point; they are called netbooks for a reason, and that is that they are designed as a means of accessing the Internet. If you store documents online and use web based tools like Google docs or the latest versions of Microsoft Office, there really is no need to install these programs on a device the size of a netbook.
Today's consumer wants a device that they can write emails on, surf the web with and carry out some basic document processing on, and a netbook can handle all that perfectly well, and considerably better than a smart phone could (particularly one that has an almost full size keyboard and trackpad). The size and configuration of a Netbook computer gives it a familiarity that many people also prefer to the latest generation of tablet computers, including the iPAD. OK, you won't be able to touch type on a netbook at the speed you normally manage, but I suspect not many netbook owners will be doing much typing anyway. And the big plus point is that you can put it in your pocket or slip it into your bag when you're done.
Early versions of the netbook used a mobile version of LINUX making them cheaper to retail, but a majority of people prefer the reassurance of an operating system they feel comfortable with so most of the major manufacturers can now offer a version of Windows. Windows XP can still be found on some, but it is a 10 year old operating system and it's been mostly replaced by Windows 7 which works just fine on most netbooks. The Starter Edition that currently ships with most netbooks includes some limitations, such as the inability to change desktop backgrounds or use the Aero Glass visual effects, whereas most full spec laptops come with a more sophisticated version. However, it is perfectly acceptable for most web based applications and any case, it is thought that Windows 8, when it arrives, will be very touch-focused so things may change yet again.
The target consumers for netbooks are likely to be totally different to the consumers for laptop computers as the products cater to their different needs. Netbooks are going to be huge, much bigger than they already are; even the vendors feel that netbooks are here to stay. But if you need to use your computer for business purposes you may feel more comfortable staying with the larger and heavier laptop; at least you'll be able to see what you're doing if you're trying to analyse financial data in an Excel spreadsheet!