Asustek's £100 Eee PC is grabbing attention at Computex 2007 because of its small size and even smaller price. Asustek gave PC Advisor the chance to use an engineering prototype of the Eee PC 701 today, one day after the £100 laptop PC was announced by Asustek and Intel.

We came away impressed: this little £100 notebook PC from Asustek and Intel has a shot at making a big impact on the market for ultraportable computers. And competitors such as Palm should pay attention.

Jointly developed by Intel and Asustek, the Eee PC will hit the market during the third quarter of this year, most likely in August or September. The £100 laptop PC will be aimed primarily at education users, but will be available more widely too.

Prices are going to start at $199 (£100), rising based on the amount of flash memory that comes with the machine instead of a hard disk. Currently, Asustek plans to sell models with 4GB, 8GB and 16GB of flash, but that may change between now and when the first Eee PCs go on sale. Other specifications include a 7in screen, a 0.3Mp camera, 512MB of DDR2 (double data rate 2) RAM and Wi-Fi connectivity.

Measuring 225mm wide by 165mm deep, the Eee PC 701 is 35mm thick with the screen closed and weighs only 890g.

Next year, Asustek plans to introduce a second Eee PC model, the 1001, which will have a 10in screen.

Asustek isn't disclosing what processor is used inside the device, except to say it's an Intel mobile chip. One possibility is that the Eee PC is based on Intel's McCaslin ultramobile PC platform, which includes either the A100 or A110 processors, formerly codenamed Steeley. Or it could be something else.

Whatever chip it's using, the Eee PC doesn't run hot. The prototype we tested had been running continuously for at least six hours when we picked it up, and the machine was barely warm to the touch.

Asustek said the £100 laptop can run for three hours on battery, which is sufficient for surfing the web or checking email. Unfortunately, Asustek doesn't have plans to offer an extended-life battery for the Eee PC. Hopefully it will offer extra batteries as an option.

The keyboard and trackpad are slightly small due to the Eee PC's size, but we were able to type comfortably. The keyboard felt fine for typing out emails or surfing the web, but we prefer a full-size keyboard for typing for an extended period of time.

Like Palm's upcoming Foleo notebook, the Eee PC runs Linux instead of the Windows operating system. In the case of the Eee PC, Asustek chose to use Xandros for the operating system, the Open Office applications suite, and a Firefox browser. This helps to keep costs down and means the Eee PC boots in about 15 seconds.

The Eee PC's user interface, which is still being developed, uses tabs for navigation. The prototype we tested had tabs labelled Internet, Work, Learn, Play, Settings and Favorites, which contained icons for related applications and websites. For example, the internet tab offered icons for surfing the web, connecting to Wikipedia, and the Skype VoIP (voice over Internet Protocol) service.

Overall, the Eee PC prototype showed a lot of promise. In terms of its size and capabilities, there appeared to be no obvious tradeoffs for a device that could function well as a second notebook PC for busy executives.

Visit the PC Advisor Community Zone – a new location on designed to help readers get the most from PCs, gadgets and business tools.