So let me see if I understand this; you had a Pentium 4 2.66Ghz @ 533FSB and they want to give you a Pentium M 1.7Ghz @ 400FSB?
If thats the case, then I am reasonabley certain that would be a good deal. Pentium M's are faster clock for clock than p4 counterparts and also require less power. There are 1000 other factors to evaluate these two procs but as it stands I'd go for it.
This is assuming that the P4 is not the P4M and is the desktop equivilant that notebook manufacturers used to put in when the first p4 came out.