Essentials -
Wireless (internal)
Not too small (not a PDA or PDA sized)
Good battery life.
Desirables -
Both querty keyboard and touchscreen capable.
DVD or better drive.
Reasonably good fundemental specs (RAM, Processor, HD space)
I’m a bit confused. Are you simply looking for an inexpensive laptop?
Not at all. Emphasis on ‘mini’. I.e. something that is actually portable… about seven or eight inches by about 5 or six inches. (about 1/4 to 1/3 the size of a typical laptop PC)
So basically you want an Asus Eee PC?
Er… Yeah. Someone recommend that to me.
Okay, well, I’ve got the EEE surf 4gig, and I like it a lot. I haven’t loaded windows XP on it, but it’s XP capable, and a lot of people who’ve tried that seem to like the results. The wifi onboard is great, although the linux wifi drivers aren’t amazing, but that shouldn’t bother you if you’re loading XP.
Size is pretty good… around six and a half inches front to back when folded up, nine inches wide, around an inch thick, weighs two pounds or so. The screen on this model isn’t full width, but seven inches - there are wider screen models available.
Battery life is good, depending on how much you’re using the wireless and so on, up to four-five hours or more for just typing and using other simple programs. It has a sleep mode for when you’re not using it but want to boot it up quickly, and that lasts around 21 hours or so from a full battery.
QWERTY keyboard is good, just a little cramped, and a few of the keys are hard to hit hard enough. No touchscreen, no built-in optical drive at all, though you can attach one via USB.
Specifications - there’s a 900 Mhz intel celeron processor I think, underclocked down to 600 Mhz or so to save on the battery power. 4 gigs of onboard flash memory, which I can’t access all of at the moment because of this ridiculous linux unionfs thing, which again is not a worry on windows XP. SDHC compatible slot and 3 USB ports, external monitor hookup, ethernet port, and a nice little portable AC power adapter for recharging the battery or running it directly off available juice.
Any other questions that don’t relate directly to running XP on it, please ask away. 
I’ve got an eee. What do you mean by a touchscreen? I think very few computers short of a tablet will have that feature. Do you mean a touchpad?
The ultra-mini’s like the eee don’t typically have an optical drive. As said above, the eee has a solid state hard drive with very little spare space. It’s a great little machine but suffers significantly in comparison to a standard notebook in hardware capability (keyboard size, screen size, hard disk and optical drive). I believe that many manufacturers are coming out with eee competition that will have hard drives. This makes sense to me.
You need an Eee. Get it, or your life will be over.
Or if you want something even smaller, you could consider a Nokia N810. It runs Linux, has a touch screen, a slide-out Qwerty keyboard, has wi-fi and bluetooth, etc. It fits in the gap between a PDA and an eee pc.
My company provided us with these. It’s an outstanding machine that had everything you require except for the CD/DVD drive. Generally I think ultra-portable machines rely on external version of those as a rule.
I was just about the Fujitsu, too. If you want to loose the touchscreen and get a DVD, then A Sony Vaio might be an (expensive) alternative.
I thought the eeepc was to fit in the gap between a PDA and a regular laptop. Will we get to the point that there aren’t any gaps left? 
Does it run XP ok?
Seriously though: What are the startup/shutdown times? My intended use for it is to wake up in the morning - grab it off a shelf, check emails, check work emails through gotomypc, do a bit of interneting, put it back and get my ass out of bed.
They are on amazon for £210… that’s cheap for hardware sold in the UK. It seems too good to be true.
Startup time to boot the ‘advanced’ linux desktop I’m working with is around a minute or a bit more, less than my windows computers but not astounding. Shutdown time is often in the 10-15 second range, but sometimes it seems to take a while or even get stuck and force me to hold down the power button.
Going into sleep mode is around 5 seconds, (automatic when I close the lid,) and getting back out of it is probably the same or just a few more.
I’ll try timing it a bit more rigorously when I get home, actually, because I didn’t bring it to work with me.
More than you ever wanted to know about the current gen of ultraportables.
I know I keep having to mop drool out of my kbd when I read about the MSI Wind. Oh baby. 
That won the argument in my mind between that and the EeePC 900/901. Battery life FTW. And a nearly-full-size kbd on a 10" chassis. (important since while I have small hands, I also spread out like I’m playing the piano)
Linux boots in about 20 seconds. It is very, very fast. You can get XP on the eee, and I’ll bet it boots pretty quick.
I like the Flipstart. It doesn’t have a touch screen, but it has a trackpad and a trackpoint to make up for that, and it also has a 1024x600 screen (the Eee has an 800x480 screen). Plus it runs Windows XP or Vista, which means I can run everything I can run on my Windows desktop directly.
Dynamism has them for only $699.
I just bought an eee 900. I couldn’t stop myself
I bought the XP version, on the basis that I can probably get the linux OS for the eee free off the internet - And I’ll be able to switch between the two because I’ll have a windows licence to use.
What is battery life like on standby/sleep mode? (I am thinking I might just leave it ‘asleep’ at the side of my bed)
Congratulations!
Cool, I hope you enjoy it!
As I said above, for me the sleep mode lasts a little bit less than a full day on batteries. I’ve gotten out of the habit of using sleep mode unless I think I’m likely to use it within an hour or so.
Maybe you could leave it plugged in and asleep beside the bed? Just a thought.