If you want to have whole disk encryption on your netbook you will be dissapointed with Truecrypt because unless you burn a .iso on a CD first, Truecrypt will not allow you to encrypt your drive, but there is a way around this, it worked for me so it should do it for you too.
Download software that will mount your .iso CDs virtually , I used Alcohol120, this is not free, but the trial version worked well, the only problem I had was finding out how to mount the virtual CD with Alcohol120 as I didnt really want to waste half day reading the manual. Once you mount your virtual .iso CD created by Truecrypt you are ready to go, Truecrypt will allow you to encrypt your whole Netbook Windows operating system as normal.
You can also use Daemon Tools to emulate the mounting of your Truecrypt recovery disc virtually.
Asus eee pc 901
This is what the Truecrypt recovery disk looks like once mounted through a virtual drive using Alcohol:
Truecrypt revocovery disk mounted through a virtual drive
You can also use this trick to avoid wasting a CD-Rom while installing Truecrypt on your desktop computer, it is pretty sad that Truecrypt developers are not allowing people to make their own choices and making the creation of an emergency recovery disc compulsory.
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There was comment from someone named Chris advising to look at at the /noisocheck or /n switch in Truecrypt and giving a link to:
http://www.truecrypt.org/docs/?s=command-line-usage
Sorry that your comment got deleted by the spam filter,probably because the way the URL is written looks close to what many spammers use.
Anyhow, thank you Chris for your input, I was not aware of this alternative work around. This is a command based solution so anyone not feeling comfortable with TC command lines can still use the virtual CD trick, on the other hand using that switch will save you having to install virtualization software.