Netbooks don't have disc drives so how do you install a new OS? You can use a standard DVD drive in an external USB hard drive enclosure or you can use a USB stick.
From Tim Sneath:
Installing from a USB Memory Stick. My wife has a Samsung NC10 netbook (very nice machine, by the way), and we wanted to install Windows 7 Beta on this machine to replace the pre-installed Windows XP environment. Like most netbook-class devices, this machine has no built-in media drive, and nor did I have an external USB DVD drive available to boot off. The solution: I took a spare 4GB USB 2.0 thumbdrive, reformatted it as FAT32, and simply copied the contents of the Windows 7 Beta ISO image to the memory stick using xcopy e:\ f:\ /e /f (where e: was the DVD drive and f: was the removable drive location). Not only was it easy to boot and install from the thumbdrive, it was also blindingly fast: quicker than the corresponding DVD install on my desktop machine.
It’s also worth noting in passing that Windows 7 is far better suited to a netbook than any previous operating system: it has a much lighter hard drive and memory footprint than Windows Vista, while also being able to optimize for solid state drives (for example, it switches off disk defragmentation since random read access is as fast as sequential read access, and it handles file deletions differently to minimize wear on the solid state drive).
The preparation steps and a how-to video from Dennis Chung:
The steps for preparing the USB Disk.
2. List Disk
3. Select Disk 1 (Replace 1 with number reflecting your USB Drive)
5. create partition primary
7. format fs=fat32 quick