I have a netbook and a laptop. While the netbook's hard drive is smaller... it's still got much more than the laptop I bought a year or so previously had - it's still 150gig and has pretty much all my music (which is a fair chunk of disc space), documents, powerpoints and what-not - since I have it mainly in case I go to work in a school and need something to hook up to a data projector it's got a fair lot of files on there.
What it doesn't have is a CD/DVD drive - so getting games and things onto it is harder (there are ways around it if needed) and you can't just bung a DVD in and watch it on the go. It runs slower than my laptop as it's got a slower processor (granted my current laptop's a year or so newer so would be faster anyway), and the battery life's less - you trade off a bit of performance for size basically.
Still runs Office (and we're using 2010 so not exactly an old version) fine, gets a little bit slower than the other PCs I have when I'm doing anything complex on Publisher but runs everything - including things like Powerpoint that some people reckoned would be a no-go fine.
Laptop on the other hand's larger, faster, shinier (cos it's new), has the full-size keyboard (if that's a factor although I type fine on the netbook one) - but I tend to take the netbook more places since it's so much more portable.
If you get one though - get a nice sleeve case for it - I've managed to scratch a really attractive chunk out of the lid of mine because of jamming it into my work bag the other week and it's really annoying me!