For what you are doing, linux will work as well as XP. Your biggest difficulty is that it’s just going to be “different”. Things aren’t going to be where you are used to them being.
E-mail: There are plenty of e-mail programs available for Linux. The only one I have experience with is Thunderbird. It won’t be that much different than what you are used to with XP.
Web: Linux, like XP, has multiple browsers available. For the most part they all work fairly well. You will occasionally find a web site that won’t work correctly under linux, but most web sites will work fine. Again, this won’t be that much different than what you are used to with XP.
Storing and viewing photos: I don’t know what you are using now, but google picasa is available on linux. It works basically the same as the windows version.
mp3: Linux has several mp3 players available. My advice is to try a few out and pick one that you like.
General: Linux is a different operating system. Some things just are different with it. This will take some getting used to.
The things that linux does poorly generally won’t be an issue for you, assuming that you are only using the netbook for what you listed. Games usually aren’t available in a linux version. Some hardware doesn’t have linux support (not an issue for the hardware that is built into the netbook). Getting linux to install properly is just as easy as windows if everything goes ok, but is a nightmare if everything doesn’t go ok. In the latter case, you sometimes end up editing cryptic command files and recompiling stuff, which is way over the “user friendly” line. Since the netbook will come with linux pre-installed, none of this is an issue for you.
One thing you’ll have to get used to is the fact that linux has administrators (called “root”) and users, and you’ll generally be running as a user. Windows is usually set up so that you are the administrator all the time. Running with full admin privileges all the time makes your life easy. You never get denied anything because of user privilege level. However, it’s also a huge gaping security hole which is one of the things that makes windows less secure than linux. It will take a while to get used to the idea of running as a user and only having root admin privileges when you install stuff, but once you get used to it your system will be more secure.
Viruses and worms and such won’t be as much of an issue. One of the reasons for this is the user/admin issue I mentioned above. Another reason is that linux benefits from “security through obscurity” (the vast majority of people use windows, so virus writers usually don’t bother targeting linux machines since their virus won’t be as effective). Linux also doesn’t attract the hatred from virus writers the way microsoft does.
You might want to burn a linux “live cd” that you can boot and play around with and see if you like it. This will let you try out linux before you get the netbook and make sure that you are ok with it as an operating system.