True. It wasn't designed for this, but it should work. I don't imagine the user experience will be nearly as good though. Do let us know how it goes for you though, I've been considering an Eee myself. Though I might wait for at least the desktop preview version first.
I also don't know if 2.0 will work on the emulator. You can probably find one that will do the trick though. I know there's a 680 one floating around.
2.0 won't work on the Palm OS Emulator or Simulator; it works now on the latter but won't continue to for very long. 1.0 should work on the emulator but will have problems on the simulator since there's no good way to change the HotSync Username.