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I've stated this before ...
The Xandros Lite package is OK if you want to do minimum things like web surfing, email, type a small letter, etc. If you want to do any serious work you need to install another distro with much better support with regards to available packages.

I would suggest using a version of Ubuntu that has support for the Eeepc line. You can get the latest version of either Ubuntu Eee here:

http://www.ubuntu-eee.com/

or Eeebuntu here:

http://www.eeebuntu.org/

Ubuntu Eee is suppose to have more polish, but both have a Live USB option so you can "try before you buy". Loading either distro onto a USB pendrive is very easy if you use UNetbootin:

http://unetbootin.sourceforge.net/

They have installers for Windows and packages for Ubuntu and SuSE. UNetbootin also includes an automatic distro download mode, but I believe the Ubuntu modified distros are not included in the list.

After you have installed either distro and before you use the update manager I would switch to the array.org custom kernel that has been optimized for the Eeepc:

http://array.org/ubuntu/

Directions are listed on how to add array.org to the your repository list. Now your kernel will always be updated automatically and will always include all of the correct modules and settings.

The entire process should take no longer than 1.0 to 2.0 hours to have a complete system including all software and drivers.

Edit:

Typing this right now on an Eeepc 701 with Eeebuntu 8.04 and the array.org custom kernel installed plus Compiz-fusion is enabled including some of the advanced plug-ins (cylinder, wallpaper, show mouse, enhanced zoom, etc.) from the Ubuntu PPA archives:

https://launchpad.net/~compiz/+archive
Posted by: MisterMiester   Posted on: 10/10/08  (Edited: 10/10/2008 @ 12:10) You are currently: a Guest | Members login | Terms of Use

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How about you?  dave.leigh@... | 10/11/08
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I've stated this before ...  MisterMiester | 10/10/08
Side note!  kevinfarringer@... | 10/10/08
Those require Windows  Michael Kelly | 10/10/08
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Star Office didn't have RTF export?  TripleII | 10/10/08
RTF blows...  T1Oracle | 10/10/08
Nevertheless...  dave.leigh@... | 10/11/08
You answered for me, lol.  TripleII | 10/11/08
Misses the point in this case.  TripleII | 10/11/08
Crappy custom distros...  storm14k | 10/10/08
Re: Crappy custom distros...  SamYeager | 10/11/08
Why not Google docs, ...  n0neXn0ne | 10/10/08
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Here is your problem  DanaBlankenhorn ZDNet Moderator | 10/10/08
RE:Here is your problem ...  n0neXn0ne | 10/10/08
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The most newb friendly Linux distro, Ubuntu?  handydan918@... | 10/10/08
The problem with your arguement...  storm14k | 10/10/08
Yes, Ubuntu has the community and...  T1Oracle | 10/11/08
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FYI: StarOffice is OpenOffice  wackoae | 10/10/08
I believe he said it was an older version.  storm14k | 10/10/08
Since OpenOffice was originally StarOffice  wackoae | 10/11/08
Correction, unless you mean pre 1999.  TripleII | 10/11/08
RE: On the Linux laptop the bundle is all  mtonnies | 10/11/08
Agreed, need to check the fine print  RayneToday | 10/12/08
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