Have you looked at the Toshiba Satellite series? I bought a P10-610 recently for close to your budget. It's a P4-3 GHz system with 512 MB of RAM, an 80 GB HD, firewire, USB-2 (3), a combo format DVD/CD burner and more. It runs Windows Media Center, a jazzed up XP Pro, but I think you can get it with XP if you're nervous about Media Center. I haven't done any serious editing with it but I have captured via firewire and run DV AVI files on it in Premiere 6.5. The additional drive is a must if you actually want to work on it. Exporting an 8-min DV-AVI to 700 kbps wmv took 28 minutes yesterday, thanks to having one drive doing all the reading and writing, and managing of the system.
David Hurdon
http://www.contentshop.tv