Here is the other side of the story. I just bought my first laptop and only really need it when travelling. So I wanted the least expensive machine I could get. I got one at Office Depot ( of all places) for $499 after rebates. I had to add $35 shipping and a $15 networking card. It is a HP Pavillion with an AMD Athlon processor which is middle of the line. It only has a 30 MB HD but in 4 years of using my old desktop machine I only used 25% of its 20 MB HD so why do I need more? If you are using it mainly for word processing you should not need all of the bells and whistles. If you are into 10 hours per day of online gaming you need the extras.

As far as extended warranties I always tell the salesman that his job is to convince me how good his product will be not how quickly it will break. In general they are considered a waste of money.

If money is no object then I would say go with the Dell. Their reputatuion is untarnished. Keep your eyes open and you will find lots of laptops available at Circuit City, Best Buy, etc. You can spend $500 or $2500 - it is up to you.