It sure can.

I have a C50 based Acer W500 which has the exact same AMD GPU and CPU but uses slightly more battery. I managed to run the following games on it at a 30+ frames per second.

Resident Evil 4 - 720p max settings

Halo 1 - 720p max

Halo 2 (Windows 7 hacked version) - 1024x768, low settings, 800x600 high settings

Portal - 720p mid settings

Portal 2 - 1024x768 low settings

COD4 - 1024x768 low

Trine, Shank 2, Orcs must die...not a problem

Halflife 2, left 4 dead series should run as well with lowered settings.

That's incredible then!

I've been on the fence about getting a new laptop ever since mine died well over a year ago because I didn't want to spend too much money. I only wanted one for Indie RPGs and some Minecraft because MC just doesn't do well on a tablet/phone.

I was thinking of holding out for the Surface Pro due to this as well but I fear that thing is going to cost way too much. For what I need I might be better off grabbing a decent Netbook for $300.

If you don't mind I would like to get your opinions of a good Netbook to grab (I live in the US) when I am ready to get one.

You seem to be a guy who knows his stuff.

as others have stated its a very poor comparision. One is meant to be a tablet/laptop hybrid. The other is a laptop. There are much better laptops than the chromebook with windows 7/windows 8 at similar costs. The only reason someone would buy the surface is because they want a touch device that can apparantly handle productivity applications, well at least the future pro one. Obviously if someone wasn't interested in that they would be buying a laptop instead for much cheaper.

A quick look on best buy USA gives me the following laptop as best value - 

http://www.bestbuy.com/site/Acer+-+Aspire+One+11.6%26%2334%3B+Laptop+-+2GB+Memory+-+250GB+Hard+Drive+-+Espresso+Black/3584613.p?id=1218416482562&skuId=3584613

Advantages: 

11.6 inch screen (portable and light)

Solid GPU, screen resolution, battery life

$259

Windows 7 (if you do't want Windows 8)

Disadvantages

CPU is a little weak for things like Excel macros, 10+ browser tabs open at same time...etc

Windows 7 (if you want Windows 8...14.99 for upgrade to Windows 8 though)

It really depends what someone is looking for. Some people want CPU power and I've seen Intel i3/ and AMD A6 laptops for 299 here in Canada. Those are obviously more powerful than this. However they all come with 15.6 inch screen. I would never want to carry that with me anywhere.

So yeah, for basic browsing, Office, and light gaming, this device is perfect IMO. I'd put Windows 8 on to it as boot time is much better as is battery.

Every Chromebook released so far had a 16GB SSD installed. From  the Googles prototype Cr-48 to the latest Samsung model. Chromebook still requires interenet connection, but support for off line applications is growing. The thing with it, is that while you only have 16GB SSD installed in netbook, you also get a 100GB of cloud storage. And to access cloud you need interent connection.

Chrome OS is similar to Andoid in regard that they are both based on Linux kernel. With that in mind and the fact that the number of full fledged Linux distributions that support ARM architecture is growing, you could always install ubuntu, Fedora...  on it.

What is beside me is why would anyone buy a netbook for "gaming"? Most of them struggle with full HD videos. Chromebook is affordable, sleek and stylish, light, sufficient for average consumer and power efficient.

OP needs to factor in the following.

tablet vs low specced laptop.

Nexus 7 vs rt. Thats better.

Exactly.

You should compare a MS tablet with keyboard, with similar competitors. ASUS Transformer Pad Infinity TF700 for instance.

http://www.engadget.com/2012/06/25/asus-transformer-pad-infinity-tf700-review/

Again what worries me is things like does it have proper internet. In other words like Ipad 3 or Android tablets where it says sorry cant be viewed on this device?

Does it have Proper ( not apps ) productivity software? 

Specs mean nothing to me as long as it flows nicely when used.

Its nice to have specs, but does it do more than view, surf and check like all other Android and Ipads.

No. If you want to run "proper productivity software" on a tablet, you'll have to wait for Surafce Pro with Windows 8.

Or he could get any x86 windoes 8 tablet now...

Even in its current form the Surface is a more enticing for consumers looking for basic productivity on the go than iPad/Android.

Also, about your post above...you would seriously take the Chrome Book over that Acer Netbook? I can not see a single reason to do so. You meantion netbooks struglling with 1080p. This was before the APU's came out. Even the latest Intel Atoms can play 1080p with ease but the APU's absolutely have no issues with it.

And why wouldn't you want to do some light gaming, even on a netbook?