Hi Bill, I use Linux on both of my netbooks (Asus eee and Dell Mini) with excellent results. Ubuntu Netbook Remix is a popular option with new Linux users. Not being familiar with the HP netbooks myself, I suggest consulting this hardware compatibility list: https://wiki.ubuntu.com/HardwareSupp...hines/Netbooks
and the Ubuntu forums: http://www.ubuntuforums.org
Ubuntu is just one of many Linux options or "distributions." You can read more about the plethora of Linux distributions here:
You might consider spending a few weeks with Linux before you replace XP. Windows and Linux have many core differences that you need to understand before you make a final decision, and there is no guarantee Linux will improve performance over XP (for example, if your performance bottleneck is due to the processor, SSD drive, amount of ram, or whatever, installing Linux can't change that fact). You can run Linux "live" from a CD, USB thumb drive, or SD card without making any permanent changes to your system.
I personally feel that a "dual boot" of Linux and Windows (allowing me to choose which OS I want each time I turn on the computer) is best for my needs, although in your case, 16gb of storage may limit that option.
Good luck! I do not think you'll regret trying Linux.