it would be better not to use xubuntu, there are things not working good, also xfce is very buggy, I don`t like it.
I don`t no why you are frustraited with the xandros? I love it, everything works out of the box and so fast nothing else is so fast, it is easy to use, I use it for voip, email and everything. Its the best for the asus eee.
But for emergency when something is happen then use Mandiva 2008.1, this runs out of the box with asus eee, I tried the live cd on it, it was great, also you can make your usb on another laptop or pc and then go on asus eee and boot it from the usb flash drive, also you can use the external usb HDD, bot work perfect.
Good luck, am happy to have the asus, sometimes am using on the this one most time, for skype and everything, another thing, the webcam and video mail recordings works perfect on xandros but not from other distros on the asus, it is especially build for the asus eee.