Yes, it can!
I did install Windows 7 RTM in this gadget and it runs very well. In my opinion much better than windows xp.
The tablet functions all work!

That Celeron is probably more powerful than Atom. Atom is an in-order processor, built mainly for low power consumption. Even old Pentium 4's are more powerful than Atom. This may change with the next-gen Atoms that Intel is going to launch soon.

While this has a unique twist of doubling as a tablet with a touchscreen, it has the same old hardware as all netbooks. Atom cpus are on par with 1GHz P3, so yeah it should run W7, not very well though.

If I can run Win7 on my Asus 904HD with its puny 900mhz Celeron and 1gb ram, then I would imagine this thing should have no problem.

What exactly is a netbook this month?

I remember that they used to be...
1) Small
2) Cheap
3) Light
4) Portable things that could just about run a web browser and do email.

Bar the tiny SSD, this thing looks remarkably like a laptop to me.

Almost there asus, how about ION graphics, a dual core atom and better battery life? Then just sign me up for the "netbook revolution".