If you decide to go the laptop route. Look into the Vostro line from Dell. I bought a Vostro 1400 which is a 14" laptop and absolutely love it! It has enough power to easily play a lot of games - 8400GS, Core2Duo, 2gb ram, etc. It was only $700 for a mostly loaded portable, very good price.
On the other hand if you go with the desktop, you should look into building your own or finding someone you know to help you do it. You can build a fairly powerful machine for not too much money. I just built my grandfather an Athlon X2 4000+, 2gb DDR2, and some other tid-bits for less than $500. If you added a decent discrete graphics card to the fray, then you could have a semi-decent gaming machine.
Good luck!
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