Firefox is going to be the killer I think. But I'd say at least a 366 Mhz PII and 64 megs Ram. I am sure that will get you in the "cheap" catagory with a laptop. There are some cool alternate window managers like IceVW, As far as distros you might want to check out Dynebolic. I really reccomend a 500+hz. PII with 128megs. but...
-Debaser