I have been buying refurbished IBM 600 series Thinkpads for my consultants, so far so good, with a $500 budget, you get enough laptop for about 90% of the things you want to do short of maybe playing Counter-Strike.
For instance...
IBM ThinkPad 600X P3/500Mhz/256MB RAM /12GB/DVD/CD/56K/13.3"TFT
$399 on eBay, I'd max out the ram, add Windows 2000, and buy a wireless card, and you would have a nice machine for little $$$.