I have a Acer Laptop which I paid £399 for it from Comet, has lasted over 3 years so far,I have got Windows Vista on it.
It came with Intel Celerom 1.5Ghz
256 Meg Ram, which I upgraded with extra 512 Meg Ram and it is copeing quite well.
Only got 30 gig hdd.
I suggest you have a look around a few high street stores and you should find a good laptop within your budget.