You have an N2600? I'm so sorry.... (I used to have a Gateway netbook with the same processor, worst tech item I've ever bought. Not Gateway's fault it was so bad, Intel just massively failed on their drivers.)
Anyway, you can use either an SSD or an HDD, it all comes down to whether you value speed or storage capacity. There isn't a hard drive out there that I'm aware of that will saturate the SATA 3Gb/s speed supported by your netbook's chipset, so you can pretty much choose whichever hard drive you want as long as it fits the 2.5" profile. As for SSD's, you can use just about any SSD on the market, but you won't be able to utilize the full potential of most SSD's, since they can achieve speeds over 500 MB/s which your netbook simply can't do. However, you can run an SSD on your slower 3Gb/s chipset and still get most of the speed improvement over an HDD.
TL;DR: Buy whatever you want, but just know that an SSD will most likely be bottlenecked by the SATA speed of your chipset.
EDIT: Looking at your original question, I rambled a bit in my answer. Yes, you can use a 1TB SSD in your netbook, it won't damage anything, it just won't operate at its max performance.