Today HP unveiled the HP 2133 Mini-Note, which will sell for under $500 with Linux.

Notebooks.com has published a detailed review and also a couple of photos comparing the current Asus Eee PC with the upcoming HP 2133.

Quote from the review: "I got the chance to sit down with a few of HP’s product managers for a demo and I’ve been using a pre-production HP 2133 for the past week.
For $499 you get a Linux (Novell Suse) operating system, 512MB of memory, 4GB of flash storage and a 1.0GHz VIA processor. It comes with a 3-cell battery which is rated to last about two hours."
Read the full review on Notebooks.