To start with a $500 machine is not a bad idea. If all you ever intend on doing is surf the web, shop online, email, upload photos to your social networking site of choice then yes the $500 machine is for you and I would not recommend getting a Mac, unless its a Mini. Once you start thinking of doing anything else as you pointed out, "it no longer becomes the $500 machine".

I can agree with you for the most part on your laptop comparison. One thing that was missing in the hardware specs were any mention of the video card/chipset. The Macbook was using the Intel GMA950 chipset for video and just recently they were upgraded to the GMA X3100 these use shared ram with the system itself. The base XPS1330 uses the same video but it at least offers an upgrade to a Nvidia based card with discreet memory. Again, if the primary use is surf, email, photos, music this doesn't make a difference. This will change as more software development is done to try and take advantage of the GPU processing capabilities. This isn't just about games but also video and photo editing. Just look at Pixelmator which makes heavy use of Core Image.

The XPS1530 starts with a discreet Nvidia based graphics solution, plus it has a larger screen. It would have been better to compare that one to the Macbook Pro. The XPS1530 I started to build against the Macbook Pro came in at $1694(excluding warranty).

I have to disagree with you on your comparison of the XPS720 to the iMac. Yes prices are comparable along with screen size, but the iMac is using an older generation of Core2 processor. The bus on the iMac is 800MHz, the XPS is 1333MHz. Yes this will make a difference in user experience when you start doing anything more than web surfing or email. Ripping music or video, photo editing, etc.. The iMac uses SO-DIMMs (as in laptop memory, as in more expensive) and only 1GB to start. The XPS720 starts with 3GB and uses standard 240-pin DIMMs. Plus you gain the benefit of expandability at the cost of an extra "box" sitting there. That is an esthetic trade-off.