Windows 7 Ultimate on a netbook

There is no difference in performance between the versions (unless you count the Aero theme, but you can disable that). Ultimate just has more features, so it wouldn't make sense not to get it if cost isn't an issue for you.

Cost, and maybe if you have a real low end netbook, you will not have graphics powerful enough for Aero.

At the end of the day, if not using Aero, joining a domain, or use Bitlocker (as well as a few other nice features) having Ultimate is just a name...

But, again, the only reason you would not use it is if the cost outweighs the benefits to you.

If you're not going to use some of the features of Ultimate -- such as Aero, Media Center, BitLocker, XP Mode, joining a domain -- it's probably a waste of money. You might not even have hardware sufficient to run Aero or XP Mode, and you'd need a tuner for Media Center to be very useful.

On the other hand, BitLocker in particular is useful for portables, from a security perspective. It can basically encrypt your hard drive contents. But, on the other other hand, you could do that anyway with a free tool like TrueCrypt. :-)

Save your money and buy the edition that's right for you, after analyzing your needs. Even if you need one or two of the features listed above, there may be a more appropriate version than Ultimate. The following page at Microsoft will help you choose editions: Which one is right for you?