There were earlier in the week that Microsoft would remove the three-app limit, but with today's announcement, Microsoft made it official.
"We believe these changes will make Windows 7 Starter an even more attractive option for customers who want a small notebook PC for very basic tasks, like browsing the web, checking email and personal productivity," Brandon LeBlanc notes on the Windows Team Blog.
Windows 7 Starter will still lack a number of features from the mainstream Windows 7 editions, such as the Aero Glass interface, various customization features (you can't change your desktop background in Windows 7 Starter--a totally ridiculous limitation in my opinion), DVD playback, Media Center features support for multiple monitors, and various business-oriented features.
Given these limitations, Windows 7 Starter is still...well...basic, even without the three-app limit, and it likely won't appeal to users who will want to get something out of their netbooks beyond getting online and word processing. With the hitting the scene--netbooks that , by the way--netbooks will soon be able to do quite a bit more than get you online.
The good news, of course, is that all Windows 7 editions , so you probably won't be stuck with Windows 7 Starter if you own a netbook.