Woah, I missed this discussion earlier.
Well, now that the new Eee PC lineup for India has also been revealed, I must admit that I was a bit surprised when ASUS opted for Windows XP entirely. Both the Eee PC 1000H (MRP Rs. 29,990) & 904HD (MRP Rs. 26,990) come with pre-loaded Windows. Plus, these are the models with regular 80GB spinning SATA hard drives instead of SSDs. So, the new Eee PCs in India are more like a premium netbook than a cheap small laptop which the original version was. This scenario is not particular to India - the 1000H at launch was $600 in the U.S. too (decently spec'd regular laptops are also priced in the same range in the U.S.). So, it was never really a budget laptop just marketed that way.
Earlier this month, ASUS started offering $100 mail-in rebate on new Eee PCs sold which may suggest that pricing would get lowered in India too (of course you'd have to wait for a while longer). I'd personally like these particular models to be in the range of 19-23k. Not wishful thinking, could very well be possible as these are approx. end user price after rebate in the U.S.
For what it's worth, the older 7-inch model with Linux is still available in India easily for 16,000 (street price).
As for Windows or Linux debate on Eee PC. I don't mind it much due to their similar pricing. It takes a genius to come up with such an idea - Windows XP 12GB SSD or Linux with 20GB SSD (on 900-series). Everyone gets to be happy