I wonder if there is a technical
reason for using Windows 7 Starter?
There are no technical reasons to use Windows 7 Starter (au contraire), the reason is purely economical (it's cheaper - you buy cheap, you get cheap): while the resource usage is pretty much the same, Windows 7 Home Premium outperforms Windows Starter on the same system in most aspects, Starter even boots slower than Home Premium (see benchmark resuslts below).
The test platform is a Lenovo IdeaPad S12.
(courtesy of German compumag Chip.de, although it's in German, the results aren't not too hard to interpret)
Windows 7 Home Premium or better on a
Most certainly! Not only is it faster with Home Premium, you also get all the bells 'n' whistles. :)
AFAIK, you can't officially buy Windows 7 Starter anyway, there is no retail version. it's only a cheap option for OEMs to sell netbooks with Windows 7.