My current laptop is an Acer Aspire 5050. A laptop on the cheap end that I bought to replace one that was stolen. It was $350 about two years ago from Best Buy. As purchased, it was slow and rather painful to use. I re-formatted the harddrive and installed XP. The result was a computer that just flew...
Lots of computers come bogged down with crapware (software that runs at startup and doesn't do a whole lot of good). Getting rid of it makes a cheaper computer much, much faster.
Money saving ideas:
1- Open source! Linux if you're a techie. Openoffice.org even if you're not. Free OS and word processors can easily cut $200 off the price of a PC.
2- Build your own. It is intimidating at first, but there are some nice guides on the internet. It is relatively easy to do and you can find deals on the hardware from places like newegg.com and tigerdirect.com. Instruction manuals are available multiple places. I used mysuperpc.com/build.shtml for the first one I built. It took around 5 hours the first time (mostly due to unnecessary nerves) and was very rewarding.
3- Ask a techie friend. Since building my own, I've built computers for a number of friends. It takes very little time or effort for me, and I usually get a free lunch with nice conversation. Win/win.
If you have any questions, this forum is a great resource. Good, smart people here who are willing to help a stranger... and even more willing to help someone like you who has constantly radiated love.