I've played around with some ubuntu hardy based distros made just for the eeePC, but the best bet I've found is to use these fixes with a standard install. Just setup hardy, just like normal, then run these fixes. It takes a while, and I've had it not fix the hotkeys before (used this to fix them), but it gets you what you need (mostly).
Here are two other resources:
eeeuser.com - how to get 8.04 working perfectly
eeepc specific modules