I wanted to install Ubuntu 7.10 and try it out on the eee pc, but I was hesitant to lose the default Xandros install in fear that the ndiswrapper drivers for the Wifi were sub-par, among other little things breaking.
I made an Ubuntu 7.10 bootable 1GB thumb drive following the instructions at:
After booting off the thumb drive, simply choose to install, then select the sd card slot!
This seems like a really really good idea to me, I mean.. how cheap is SD now? I just found an 8GB SDHC card for $69. WAY more space for more utilities and user data, and you never have to worry about toasting your system!