I've considered Ubuntu... they seem to be the best at memory management/ease of use.
HAHAHAHAHAHAHA... Man, you brought tears to my eyes.
Ubuntu is based off of Debian. Debian is notorious for implementing a ton of absolutely unnecessary services on their default installations. These services waste a ton of resources. Ubuntu takes it a step further by adding even more bloat to the system. Now, for an average computer, the developers can get away with this kind of thing even though it's bad practice. But netbooks are very different. The reason why they can be so cheap and so small is because they are designed for unitasking. Having an operating system that runs a ton of services which occasionally get woken up means that your experience will not be smooth.
Anyways, you're best off with a Linux distribution that focuses on minimalism. Of course, you've probably already heard me trumpet Arch Linux enough, but there are also other distributions like Mint (
Main Page - Linux Mint) which are a little more friendly to someone who hasn't used Linux before.
Oh, one other thing: memory management doesn't necessarily mean using the least amount of memory. A typical Linux-based operating system will use much more memory than Windows XP, but the way in which it uses memory efficiently allows it to cache files that it anticipates you'll use to memory.
iskor12: This is a major problem between different distributions of Linux. Ubuntu is still using an old version of the X graphical subsystem. That old version has drivers that barely function correctly. However, the new version of X has much better Intel drivers. I have an Intel GMA 965 on my laptop and I can play 3D games, use Compiz, etc. very easily. A lot of people give Intel a lot of crap for how bad their graphics accelerator line is, but when you run it on a minimalist Linux distro using their newest drivers (which are better than the drivers for Windows), you probably wouldn't be able to say that at all.
ArchLinux always has the newest versions of software (they package things literally hours after new versions are released), so I get to enjoy excellent graphics support.