My wife and I just purchased a small netbook for my son as a high school graduation present. IT came with W7 Starter. After reading about W7S, I can't say that I am real impressed. You can't even change the desktop background image on it. It also does not come with codecs to play a dvd, if you were to hook up a portable dvd player via a USB port. You can however download VLC media player to get around that small misfortune. I like VLC because it plays nearly every video and audio format I have found.
http://www.videolan.org/vlc/
http://www.videolan.org/vlc/