Nowadays we can buy laptops under £500 - all seem to be using the Celeron M 1.4Ghz CPU. Though a Celeron the spec is much better than it used to be.
I bought a Dell Inspiron 1300 and am very pleased with it.
(I'm not pushing Dell, there are many manufacturers offering similar specs and prices)
This particular laptop has a 15.4" wide screen so it's not small and weighs about 6lbs.
The performance for the simple (ie not gaming) tasks is fine, I rarely notice it lagging and get 2 -3 hours battery life.
Consider the Celeron M - it could be much cheaper than a Pentium M and you may not need the extra power.