It is a single core machine, which is not really as helpful as HT powered cpu's.
Even if the Atom is a smaller processor, it has HT, and therefor the ability to do some virusscanning in the background, while still being snappy in executing small commands like opening windows.
This singlecore device does not have that option, meaning the thread of opening a folder needs to be squeezed in the main thread of the (doubtlessly) faster CPU.
Despite the CPU being faster, it needs to wait for some cycles before it can actually execute the command of opening a folder.
While on a dualcore, or hyperthreading machine, the OS will automatically rout the command to the first available thread or core.
So in my mind, for smaller tasks and office productivity an Atom is much better. Depending on the processor, benchmarks need to describe exactly how fast this 1,2Ghz Athlon CPU compares to a 1,66Ghz Atom processor. Chances are the Athlon will perform better on single threaded applications (like encoding of music), but might or might not be better with dual/quad threaded applications.
Also the battery life will be a large definer of whether or not the device will become a success.
A 3-5 hours battery life with a 1,2Ghz processor isn't really spectacular anymore;in fact, perhaps it is better to go with a Core2Duo machine @2Ghz for $400. They might have an hour less battery life, but they perform at least twice to 4 times as fast.
People that love battery life (that eg: just listen to mp3, and browse web),will prefer a real Atom netbook.
People that prefer performance might go for a budget priced laptop.
I think this netbook is not out of the ordinary, sorry to say; and I see no specific reason as to why buy it!
It is impressive to cram a 1280x800 resolution in 11" though!