Why you don't want Windows 7 Starter Edition
Unless the netbook you want is only available with Starter Edition, we'd say pick one with Home Premium instead – or pay for the Anytime Upgrade, which you can get online without re-installing Windows – because there's a lot of key Windows 7 features that aren't in Starter.
You don't get live thumbnail reviews on the taskbar, or any other Aero tools - like Aero Snap to arrange windows, Aero shake to hide other windows, Aero Peek to see the desktop quickly. You don't even get Aero Glass and the option to choose a personalised background.
Cheap netbooks don't have touchscreens so you won't miss that but you don't get Windows Media Center and you'll have to buy extra software to watch DVDs (Atom netbooks have no problem playing DVDs or running Media Center, so this is about price not performance).
You can't use multiple screens, share out your internet connection or switch between accounts without logging off. You can't create a HomeGroup (although you can join one if you've created it on another PC, and you don't need a HomeGroup if you only have one PC).
There are plenty of free sticky note tools so you won't miss that too much, but we reckon the Snipping Tool for grabbing sections from web pages and error messages is useful.
Put it all together and although these are nice-to-have rather than must-have features, there's so much missing from Starter Edition that it's not a good buy.
Why you don't want Windows 7 Ultimate
Frankly, neither is Windows 7 Ultimate. Originally Microsoft didn't plan to sell Ultimate except as an option on high-end PCs; we suspect that changed as much because PC makers weren't interested as because users were.
If you have Vista Ultimate, you don't have to upgrade to Ultimate – and we suggest you don't. There are no extras and you don't need Ultimate to get Media Center; if you want business and pleasure, remember – it's all in Professional.
Ultimate is exactly the same as the Enterprise edition, but you'll only need networking features like DirectAccess and BranchCache and Enterprise Search Scopes if you actually work for an enterprise (in which case, they'll give it to you).
Booting from VHD is useful if you experiment with different versions of Windows; again, that probably means you work in a big company. Otherwise there are only two reasons to even consider enterprise. One is multiple languages; if you need to change your PC back and forth between an English and Spanish interface regularly, you have to shell out for Ultimate.
The other is BitLocker and BitLocker To Go; encryption for your whole hard drive and removable drives respectively.
Frankly, we're surprised Microsoft hasn't put these features into the Windows 7 Professional; in fact, if you keep details like your downloaded internet banking statements on your PC the way the Inland Revenue expects you to (unless you want to kill the same number of trees at your own expense by printing the statements for your records), you'd probably like to encrypt your hard drive, too.
Perhaps Microsoft thinks BitLocker is enough of a feature to keep big companies shelling out for the Enterprise version, or it doesn't think enough small business users care about protecting their data to find BitLocker useful.
Apart from that, each Windows 7 version does have the right features; there's one version for home users, one version for business users and one version for making sure you don't have to spend time upgrading your cheap netbook to Windows yourself.