Which notebook should I purchase - FOR UNDER $500 ?

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I know very little about computers, but am seriously considering buying a notebook/netbook computer or small laptop....just something that will give me word processing, internet access (for watching videos and chatting as well as visiting forums) and the ability to work with a phot0 processing program of some kind in the privacy of my own room, rather then risk disturbing others (or being disturbed by others) on the "family machine"

Audio imput capabilities would be a nice bonus (in case I want to podcast or talk to someone over Skype) and having the power to process a sim city or two would also be an excellent bonus.

But I don't even know what type of memory or processing capabilities I'm looking for to do that...maybe someone here can help me?

And I'm on a budget, would like to be able to get "all fitted out" - computer and accessories, for at most $500 dollars American/Canadian. (I'd like to say including tax, but that might just be a silly dream - 12% sales taxes here)

Perhaps you are in the computer buisness and now exactly what make and model I should look at? Any suggestions/help would be appreciated, especially if I can get some idea of needed process/memory size to do what I want to do?

Thankyou.

Toshiba NB300

Mum bought one of these, she absolutely LOVES the thing. It's got a nice keyboard for a netbook too, so you don't have to worry about cramping your hands. With all sorts of fancy upgrades and going to one of the more expensive shops because she wanted it right that second it came out to 540.

<This> is pretty nice. My brother has one of these, it runs fast, and he uses it the same way you intend to. I'm not sure if it has a microphone built in, but it should accept any PC microphones(3.5mm, or USB) Try to avoid gateway if at all possible, and remember that Newegg is usually cheap and has a good return policy.

I got an Eee Asus HD1000. And I love the little guy. I got it when Target had it on sale for $230. When I got it it came with XP now I believe they have it with Win7. It's got 260 Gig HD and I threw and extra Gig of Ram in myself for $20 and the thing is perfect for sitting out side or on the couch and doing some work or just net surfing.