New market, no worries

Microsoft, meanwhile, on netbooks last July to allow screen sizes up to 14 inches and touch-screen capabilities. It also doubled the maximum storage to 160GB.

A Microsoft representative declined to disclose the current full guidelines for licensing XP Home, but said that "Microsoft software does support optical drives on netbooks, including Windows XP Home."

Solis says that Microsoft is "smart" in being flexible.

"In the end, they are going to want that business," Solis said. "Netbooks are a growth market in a struggling economy. And it'd be much worse if the netbook makers went to Linux, instead."