What are you using it for? If it's just office and web browsing, a netbook should suffice. If you're willing to spend a little more, you can pick up a Dell Inspiron 15 with a decent configuration for $589. That's with a Pentium Dual Core 2.0ghz, Vista Home Premium 64-bit, 2gb DDR2, 160gb HDD, Radeon HD 4330, and a 6-cell battery. The Dell Inspiron 13 has a similar configuration but uses GMA X3100 graphics and Vista Home Basic for $499 with a 4-cell battery, $539 for the 6-cell, or $569 for the beefy 9-cell.
Just use OpenOffice seeing as how it's compatible with MS office for most stuff. You won't get a laptop with Office preinstalled for $500 unless it's used.