I have two suggestions. One is that you try Chromium, it should be better than Firefox on your system. The other is that you consider Gentoo Linux. Someone else recently posted at the Gentoo forums that he switched from Ubuntu Linux to Gentoo Linux and saw his memory usage drop to 70MB of RAM at boot:
http://forums.gentoo.org/viewtopic-t-828094.html
He later posted in another thread that his memory usage is 200MB with his typical applications open (firefox being one of them I assume):
http://forums.gentoo.org/viewtopic-p...-.html#6284135
He said that it used to be about double of that with Ubuntu and also that his system only has 512MB of RAM, so with 1GB of RAM, you should be golden.
The main drawback to using Gentoo Linux is that installing it will take days on your netbook, because it requires that all software be compiled from source, but in my opinion it is worth it.
Anyway, you could switch to Chromium, Gentoo Linux or both. Any of those choices should help alleviate your issues, although I suspect that your lag issues are more of a result of your netbook's processor than they are of your browser's memory usage, in which case, switching to Chromium would make the biggest difference.
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