Hmm.  This is a bit confusing.  Starter edition wasn't first designed for people expecting a lot from their computer.  It wasn't even designed for people in the US.   I haven't followed Win 7 like I did Vista.  Vista and XP Starter Edition was designed for beginner PCs in emerging markets.  Nothing to do with netbooks really.  Although netbooks would probably be used in those countries.

These are videos I saved when I was following the development of Vista.  Near the end of video 1 they talk about the 3-program limit and beta testing data.  These are internal interviews with Microsoft devs:

[b:02444e6840]Title[/b:02444e6840]: Windows Starter Edition -- One Million Served and still growing [<a href="mms://wm.microsoft.com/ms/evnet/WindowsStarter_s_ch9.wmv">Stream</a>]
[b:02444e6840]Date[/b:02444e6840]: Tue, Oct 10, 2006 2:00 PM
[b:02444e6840]Length[/b:02444e6840]: 00:16:01
[b:02444e6840]URL[/b:02444e6840]: http://channel9.msdn.com/Showpost.aspx?postid=243631

[b:02444e6840]Title[/b:02444e6840]: Michael Kaplan - Bringing Windows Vista to International markets [<a href="mms://wm.microsoft.com/ms/msnse/0512/26042/michael_kaplan_2005_MBR.wmv">Stream</a>]
[b:02444e6840]Date[/b:02444e6840]: Wed, Dec 14, 2005 10:01 PM
[b:02444e6840]Length[/b:02444e6840]: 00:29:55
[b:02444e6840]URL[/b:02444e6840]: http://channel9.msdn.com/Showpost.aspx?postid=146169

Unfortunately, Channel9 hasn't covered Win 7 like they did Vista.

http://www.dfbgaming.com/Thread6222.html