I think this is an issue with a batch of the S205s. We recently bought 28 of them at our school and already 3 of the keyboards have this. No signs of any damage on any of the netbooks and given I've been told of a further 2 cases today, I can only guess the rest of the netbooks will also develop this issue over the course of the next few months.
In our cases, there's no beeping or complaints until you get to the Windows XP login screen and it fills the password box (I think the maximum password length is 127, at which point it starts the beeping). On the first laptop I thought it was a one-off software glitch, as pressing the backspace key to remove the characters from the password box (or indeed any key) seemed to temporarily fix it - no more beeping and no more key presses, however it also happens using a Linux live CD. Given that it sorts itself out after pressing another keys makes me suspect it's not a key issue as such, more something in the electronics of the keyboard.
Removing the keyboard and replacing it with another from another laptop fixes the issue, so I know the issue lies between the keys and the ribbon cable connecting it to the motherboard. If you put the original keyboard back in, the issue returns, so I don't think it's something as simple as a loose connection in the ribbon cable.
