I'd third the recomendation to stay above 10" or above just for the keyboard alone. My brother has a Lenovo model and is quite happy.
I recently purchased a Dell D420 for ~$300 on Ebay. Slightly larger than most netbooks, but still quite and light and portable (no optical drive). I've had great luck with the Dell business class laptops and this is an almost netbook offering in that range. The ExpressCard slot was a huge plus for me, as I love my MoGo mouse.
I think Dell recently pulled their smallest size netbook from the website and will relaunch an updated one soon.
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