In that price range the good laptops I'd be looking at:
Dell Inspirion 6000: 15.4" widescreen, pretty big and heavy
Gateway M250: 14" widescreen, pretty thin & sleek
Dell Inspirion 700M: 12" widescreen, pretty cramped keyboard and thick/heavy for a 12"
12" iBook: a great laptop, it just depends on whether she wants and Apple or not
I'm really not actually trying to say the Dells are bad. The Dells are extremely hard to beat because of the coupons. You can load up a $1500 laptop with a 4-year on-site wattanty and use the $600 off coupon to get it for slightly under $1000 after tax. I'm just pointing out what I don't like.
The Gateway M250X is an extremely good laptop for $900. It comes with a Pentium M and 512MB. The screen upgrade is only $10 and the higher capacity battery is only $20.
The average person looking for a cheaper laptop really needs to consider Dell & Gateway because of their on-site warranties that go up to 4 years. Places like IBM also have excellent warranty coverage, but you're not going to get something cheap from them.
The problem is that your 3-year on-site warranty will run about $200 and 4-year on-site will be about $300. That makes it hard for me to justify getting anything but a Dell, although you can get the Gateway M250S (only real downside there is battery life) for $700 then add the Ultrabright screen for $10 and the 3-year on-site warranty for $210 then still have a great laptop for $920.
You always want to actually use something before you buy it. Make sure you go to a Dell kiosk in the mall and go to a Best Buy to play around with the Gateways (the model numbers are different, but you can tell which one is which by comparing the screen sizes).
Of course you can get a 12" iBook for $899 with the educational discount. Those have the best keyboards I've ever used on a 12" laptop -- they're really just as comfortable as a full-sized keyboard you'll find on 14"+ laptops. The warranty coverage is terrible unless you pay for Applecare, but that's only $183 with the educational discount, so you're coming in at $1082 for a 12" iBook with a 3-year warranty, which isn't breaking your budget too badly.
The HP DV1000 is a good laptop that everyone seems to like, but that's actually pushing your budget. I think it's $1000 without any extra warranty. It's a very good laptop and feels really solid except for the keyboard which is just weird and bendy.
The Gateway 320 series is pretty good, too, if you want something with a 15" screen. It's even thinner than the 14" Gateway and pretty light, and you can get it with a 3-year (not on-site) warranty for $760 if you get the Celeron model.
If she's actually going to be using the laptop in class, she probably doesn't want anything bigger than 14". I'm taking some particularly boring classes this summer, and I can get away with surfing the web on my 14" laptop without getting any glares from the prof, but the students with their school-issued 15.4" laptops open in class attract some attention.
Just don't buy something generic with no warranty. She doesn't need something that'll play the latest game at high resolution. She needs something fairly light that'll be reliable. And from what I know about 18-year-old girls, getting something stylish is probably an enormous priority, so that puts the Gateways and the iBook at the top of the list.