trivo_gurl: Slow down!
Don't install Ubuntu or anything like that, hoping this will in some magical way clear the road. It won't!
Just stop right there.
You get to a terminal window by pressing keys Ctrl, Alt and T simultaneously. Which you could have found out by googling for "eeepc terminal".
To help you getting going with your eeepc (apart from the manuals), there's a website specifically for eeepc owners. There, they have all sorts of goodies, aimed at easing people into the linux-world as found on the eee. Go to
http://www.eeeuser.com/.
Please: Go there, visit the forums, read the stickies/FAQ's and in general take your time to familiarize yourself with the device. The manufacturer has actually gone to great lenghts in order to set you up with a nice environment.
E.g., did you know your 701SD comes with a built-in return-to-start-function, designed to bring you back to square one in five minutes flat? I mean *built-in*, no usb-sticks or DVD-drives or anything needed!
Wanna know how? Well, it's in the manual

But chances are you don't need it. Anyways, it's an emergency-brake-thing, so don't use it casually!
Next thing: Your 701SD as delivered from Asus is NOT a 'full-blown PC' onto which you can just go ahead and install anything you happen to want to install. The preloaded software has nice GUI-tools providing access to a limited number of applications, targeting beginners and casual users.
Should you insist on doing everything, all the time, and preferably five minutes ago; be prepared to climb a steep learning curve! For starters, you will need to get access to tools and facilities AFAIK not included in the factory-made software. You'll need windows-emulators, compilers and dev-tools, repositories providing countless other tools and most importantly, you'll need knowledge on how to make use of these things.
This just doesn't happen overnight.
So my advice to you is to realize that the 701SD in its present state offers limited possibilities. And
lots of newbie-fallback-security!! Not a bad thing at all.
This is actually a great platform for learning the basics of *nix computing, acquainting yourself with e.g. shell commands as offered by the factory shell. Are you familiar with ls, mkdir, rmdir, ln, cat, top, sudo, apt-get and other commandline-tools? How about the directory tree structure? The use of .conf and rc-files? Basic system management? Because you wanted a terminal window, so you're gonna need stuff like this in order to get productive. Within the boundaries of what the stock Xandros software package offers - which by the way is plenty for beginner usage.
The 701SD can do all the fancy stuff, trust me. I have one here (sadly not mine - i merely borrow it) that does Compiz/KDE 3D-whirling-boxes-desktops, wobbly windows, wardriving, fullblown C++-compiler, GUI IDE to go with that, link to 24000+ installable program packages and all the whizbang-geek-stuff imaginable. Really. But I didn't
just do that. It took a month or so - and I've got 15 years of practice under my belt.
Your 701SD is no different. But go slowly.
Suggested course of actions:
* Figure out how to do factory reset using built-in tool (See manual)
* Get at the terminal (Ctrl-Alt-T) and learn basic commands for navigation etc.
* Create USB-stick with factory-reinstall-software (See the DVD + Manual).
* Test the USB-stick. When test is successful, store the USB-stick somewhere safe.
--- You are now able to rescue your 701 from all disasters ---
* Return to the terminal. Learn about apt, the Xandros repositories etc (
www.eeeuser.com) and start pushing boundaries.
* Learn to create a small shell script to e.g. show time or similar. This involves the use of an editor

* If you absolutely need access to windows executables, investigate 'wine' a bit closer. Here, you might find the Xandros repositories lacking tools you will need. Go to
http://www.eeeuser.com/ and educate yourself some more.
* Repeat previous step as required to implement whatever you want to do.
At some point you will find the Xandros 'playground' to be insufficient. It simply doesn't offer the tool or functionality you want. But hey, by then your chances of successfully moving on to another 'distro' are vastly better than today.
At that point, visit
http://wiki.debian.org/DebianEeePC.
No sooner.
Yes, there are other distros out there aimed at netbooks - e.g. Ubuntu. But i'm biased

Most Linux people are. The point is that you by then will have to make your own path. Of course the community will offer (biased

) advice and feedback. But ultimately, the ball will be in your courtyard.
Good luck!