I would go 1 or more GB of RAM. A good Video card. Check pricing compared to Alienware. I currently use external HDD thru a firewire card but for reliability it is hard to beat a RAID and Alienware has them onboard.
For DV editing, any laptop sold within the past 5 years or so would do well. For HDV, you will definitely need something like the unit you describe, unless you opt to use GearShift to build proxies and then edit with those proxies.
As mentioned, going to a gig of memory is probably a good idea, and easy to do. As for video, I don't think laptops offer the option of switching out video cards. In any event, it won't make any difference with Vegas, though I think it could affect performance with external monitors.
the other main thing is i'm trying not to spend more than $700 or so...as i have put a lot of money into a desktop...i just need a laptop for internet purposes and thought it would be nice to be able to edit a little on it.
It will definitely work and you don't NEED the 1 gig.
I've cut a lot of stuff on a little 1.3mhz Sony laptop with 512k and it worked just fine. Now this was a while back and I was using Vegas 4 at the time. But Vegas is an amazingly gentle editing system when it comes to hardware.
As far as HD goes, I think you will need a more powerful setup - but for location edits - go for it.
BTW - I personally just bought a superlight AVARATEC 12" at Circuit City for $749. (This is not a recommedation - I never even heard of AVARATEC before this sale - it's a price/size based decision).
I'm going to dedicate it to use with DV Rack HD for a shoot I have coming up. It's got the speed (Turion) and a 80 gig HD, so I've got quite a few hours of storage for an easy day's shoot. I tested the battery yesterday, and I'm hoping for 2 hours, though that wasn't with the strain of continual recording. I'll report more, if anyone's interested.