After bugging some friends for opinions as well, I've decided to just suck it up and spend the extra money to upgrade ram.
If it helps, I'm pretty much just using the netbook for school; taking notes in classes, surfing the net, IMing, and small stuff like that. Battery life I'm not TOO worried about, but I would like to last a good 6-8 hours since I'm in class all day (from about 9 am until 6 pm

). Also, I'm kind of an interface snob so the fact that Win7 Starter doesn't have Aero Glass bugs me a lot. ;_;
@Pikarya: Definitely going to use that guide if I decide to go Win7, thanks! :D
I've never used a Linux OS before, but Ubuntu Netbook Remix does look interesting though. Probably going to look into both that and Tiny7. I'm super indecisive though, so more input on either OS would be great! Thanks again!