Support will come in the form of the two simplest flavors of Windows 7 (home basic and starter). However, I can say from personal experience that the current Atom (N270) with Intel's chipset will run Windows 7 Ultimate (RC1 Build 7100) as I have it running on an MSI Wind U100. I did have to bump up the RAM to 2GB but I would have done that anyway.
So netbook users do not fear, Windows 7 will run on your favorite new toy. You just won't be able to buy a netbook with Windows 7 Ultimate preinstalled.
Read more here.

Intel is quite sure that its upcoming Pine trail-M platform will support at least two versions of Windows 7. Intel has informed its valuable partners that Pinetrail-M, mobile platform that includes N450 CPU and NM10 chipset will support Windows 7 Starter and Home basic.
Since a lot of people already tested Diamondville, Atom based notebook and windows 7 RC1, we already know that all Windows 7 versions should be able to run on existing and future Atom platforms, but Microsoft will definitely want to draw a line, and limit some Windows 7 to more expensive notebooks.