I have installed PMS on an atom 330 motherboard, with 2 Gb of RAM, http://www.intel.com/products/desktop/m ... erview.htm
to be more precise.
I installed an ubuntu 9.04 server on it (no X server), and I can tell you that the result is literally awesome!
The only tricky part was to get a multi-threaded version of mencoder to run on it, but once this was done, I could transcode 720p mkv movies with 5.1 sound and subtitles without any stuttering at all.
The main drawback of the eee box is that the CPU is a single core intel atom. In any case, you should try to install the multi-threaded version of mencoder using the tutorial available on this forum because the single core atom is virtually made available as a dual core CPU, so you won't be able to fully use it if you run a single threaded version of mencoder.