Forbes.com

BURLINGAME, Calif. — Intel typically doesn't offer demonstrations showing what its products can't do well. But the chip giant made an exception earlier this month, when it invited investors to its Santa Clara, Calif., campus. Intel demonstrated that computers built around its Atom processor can't handle streaming video with the alacrity that machines built around its mainstream processors can.

Intel's point: When consumers buy a netbook, they need to know they're not getting a multi-media marvel. Early on, confusion over that point had led to return rates as high as 30 per cent for netbooks last year.

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So, if you're considering a netbook, you should know what you can't do with one of these sub US$500 machines. Don't expect to play the latest games, use it for video editing or watch a lot of high-definition video.

Apple is eager to play Ralph Nader, too, with Chief Operating Officer Tim Cook bashing the dinky machines on a conference call with investors (see "Apple Hates Your Netbook"). "When I look at what is being sold in the netbook space today I see cramped keyboards, terrible software, junky hardware, very small screens," Cook said. He has a point: A $1,300 MacBook costs a whole lot more, but it can also do a whole lot more.

The real problem? If consumers keep cutting back, fewer and fewer of them will care. Gartner predicts sales of low-cost netbooks will double to 21 million units in 2009 from 11.7 million units last year. The recession, meanwhile, has crunched sales of higher-margin notebook computers.

That has investors worried the new stripped-down machines will pick scanty PC profit margins clean. The truth is, the PC industry is scared of these dinky machines.

But if you're on a budget, and you know what you're getting, you shouldn't be. The netbook offers an inexpensive machine for surfing the Web on the go that isn't limited by a cramped smart phone keyboard or a full-sized laptop's big, honking screen.

The best part: If you lose it or it breaks, you're only out a few hundred bucks. Looking for a multi-media marvel? Keep looking. Want something you can tuck into your pocket? These aren't for you. Looking for a little cheap fun? Then a netbook might be for you.