I know 4 people who own one. The general opinions are:
1. Speed.
Not the fastest machine on the planet, nor the most efficient. Unless you upgrade to 1GB RAM, you can have a web browser or a PDF open, but not both (unless the PDF is small). Don't expect too much multitasking abilities, but it is somewhat capable. The screen is also pretty small (800x480 resolution), but at least it's usable.
2. Portability.
As my housemate so often gloats, "Can you put your laptop into your jacket pocket?". It is a really small machine, and it's portability is second to none. Due in part to it's low power processor and small screen, the battery life is pretty decent. It doesn't generate much heat or noise (occasionally the fan turns up, but it's not that noisy). The only portability beef I've heard so far is with the power adapter, which has some difficulty fitting into confined outlets.
3. OS.
I don't know of anyone who uses the default OS... then again, the only people I know who own them are CS majors. Windows XP runs decently on it. I've heard good things out of EeeXubuntu.
4. Storage.
Storage is definitely a short-fall for this system. It's usually recommended to put the OS and applications on the SSD, and mount the SSD as read-only, so to save on read-write cycles. Put documents, videos, etc on a thumbdrive or external HD.
In all, for $400, it's definitely a nice toy. Despite the drawbacks, everyone who I know that owns one does not regret purchasing one, and for the price, would not shed any tears if it were to suffer damage, destruction, etc.