I took Pupeee 4.2 for a spin on an Eee PC 1000H and it was able to boot from a flash drive in about 45 seconds. Once loaded, programs launch quickly and the operating system feels very responsive. Performing some tasks like configuring the netbook to join your wireless network aren’t as intuitive with Pupeee Linux as they are with some other Linux distributions like Eeebuntu. But Eeebuntu won’t fit on a 128MB flash drive.
You can either run Pupeee as a LiveUSB (which means you can boot from the flash drive every time but your settings won’t be saved), or choose to create a save file when you exit so that your data and settings are saved. You can also install Pupee to your hard drive or solid state disk.