1. Turion x2 1.8 and Home Premium, 12.1," single gig stick (easier upgrade to 2GB)
2 Core 2 (not Santa Rosa) and Vista Biz, 13.3"
There's the differences, as far as I can tell. The first one will obviously be lacking in CPU power, Core 2 has both a Mhz and an architecture advantage. Both laptops are small enough to be very portable, so do you want ultraportable or more usable/easier text reading etc? Lastly, Vista Biz has security extras, while Home Premium is basically XP MCE 2.0, is this machine going to be your all-in-one, or just something for schoolwork?
Seems to me it's a toss-up, I'd prefer the Core 2 and slightly larger size of #2, but I'd probably prefer Home Prem over Biz, and it will be nice to save yourself a few bucks and get 1x1GB instead of 2x1GB in the future.
Edit: Heck, I almost forgot the price difference, we're talking about a $400 difference here, to me that makes it a no-brainer, go with #1. Its CPU isn't the best, but I'm still doing alright on a 1.66 Core Duo, so I have confidence you'll get along just fine. Granted, a lot of that depends on how much and how often you rip music, movies, etc.