You should check out this laptop here:
http://www.newegg.com/Product/Produc...82E16834146281
It is a little over the budget, but it has a nice rebate on it.
Although it doesn't have a 7200 RPM hard disk in it, the 7200 RPM hard disks generally only have average sustained transfer rates of only 5 MB/s faster than those of 5400 RPM hard disks. SATA drives will not be noticably faster if at all because the internal sustained transfer rate (what really matters) will not be improved and the external burst transfer rate (what doesn't really matter) will not be improved by much because it will be limited by the small cache of laptop hard disks.
Also, about the RAM. 32-bit Windows XP cannot use more than 2 GB of RAM. 4 GB of RAM in a 32 GB OS is typically reserved for servers. Also, 4 GB might be needed if you will be running 64-bit Vista. Take a look at this:
http://www.techsupportforum.com/721314-post5.html
Other than that, it has everything you are looking for. While the screen is only 15.4", it will seem bigger because it has the resolution of a normal 20" monitor.