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I write code on it, compile kernels, surf the web, answer email, etc.
I'm pretty sure the Pentium M can do all of those things without a stumble or stutter. Remember, because of their shorter pipeline and huge cache a 2Ghz P-M is approximately equivalent to a 3Ghz P4, much like the K7 and K8 and their model numbers. That's in addition to their lower heat dissipation and lower power consumption.
Personally, I don't see the point of a desktop replacement laptop (especially as long as the sound sucks) because they don't perform all that much better than the higher quality thin and lights and weigh a whole lot more, and often sacrifice battery life to an extreme degree. In addition they don't come close to actual desktop performance per price, or at all really. I see why some people opt for them, I just prefer the extra portability.
By the way, plenty of 12" laptop screens look great at 1024x768, you just use them in different ways from a 1600x1200 desktop system. And the Panasonic Y2 I mentioned earlier has an incredible 1400x1050 screen in a 3.4lb package. You don't need to have a big laptop with a high end 3D graphics chip to have a nice screen. Of course, that's not to say a highly scaled down GPU from Nvidia wouldn't be nice.
You can put any 2.5" laptop hdd in (almost) any laptop, try buying from someone who gives you decent options. Honestly, I don't even use the numberpad on my desktop keyboard and I'm looking at a laptop style keyboard from Unicomp.