It's tiny. Really tiny. I like that - it makes for a very portable laptop, but I'd suggest looking at one "in the flesh" before you buy one. It can be quite a surprise just how small it really is. The power supply is also very small - about the size of the average mobile phone charger.
One consequence of it being so small is that the keyboard is small. I'm not a fan of laptop keyboards - special keys are never where I expect them. That's especially true on the Eee PC. I find I can touch type OK, but I have to be careful when typing capitals, because the right shift key is tiny. Because the keyboard is so small, the backslash (\) and pipe (|) are on the Z key, and need the Fn key to be used. If you write shell scripts in Linux (like I do) then having to hit Fn-Shift-Z to get a pipe is a bit of a pain.
The screen has a resolution of 800x480, which isn't much, although it seems to be a good quality, clear screen. Some applications have problems with such a small screen. Holding down the ALT key while left-clicking and dragging will move the window, which is sometimes required on settings dialogues, to make the OK/Apply/Cancel buttons visible. Jen found that the games she likes to play simply won't work on the small screen.
www.eeeuser.com is a useful site - they have a wiki with all sorts of how-to's, and a forum where you can ask for help & advice. I recommend setting up extra repositories to gain access to more software, and installing Launcher Tools to make it easier to add new launch icons for new software.
The default interface is unusual, and has been described by some people as being child-like. I like it, I think it's ideal for such a small device. If you don't like it, it's possible to switch to a full KDE desktop if you prefer (this has a menu similar to the Windows start menu). I tried this and didn't like it. It was too cramped for my liking, and also seemed to take longer to boot. Another option is to customise the default interface - it uses IceWM, so can be customised by editing the IceWM config files in the usual way.
It includes Pidgin (previously named Gaim) in the default install. This is a very good instant messaging client (also available for Windows) that can handle pretty much every IM system. Chats are shown in a tabbed window, in a similar way to the way Firefox shows web pages in tabs.
I haven't really tried the webcam or Skype yet. There is some voice command software, though this seems to mainly be a gimmick - you can use it to start a program (by saying something like "Computer Web" to start Firefox), but that's all.