Your netbook should run Windows 7 easily and it can be done using a USB memory stick, but honestly unless you know what your doing it might be a bit tricky.
http://gizmodo.com/5257386/how-to-install-windows-7-on-almost-any-netbook It applies to the beta version but it should be similar for using a retail setup.
If the store will exchange it for you then you might be best to do that.
if you do go down this route see if you can make a back up of your existing setup first - just in case it all goes pear shaped.
[This message has been edited by Tonewheeldude (edited 02-16-2010).]
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