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T40 is too large? personally I like the bigger screen and 2 spindle design. The media slice requirement for the X's is a pain. Also the T40 is inherently faster than the X.
Also, check out IBM's ebay store, you should be able to find a laptop in your price range in there.
I own a Nomad Zen Ultra, 60GB. While it isn't the perfect mp3 player, it did give me 40GB more than the 20GB ipod for the same price. Does it have all the cool features as an ipod or a sweet touchpad wheel to navigate? No, but I find it intuitive enough to go through my mp3s without a problem...
Do you get anything in safe mode?
Fn + F7 do anything? (or whatever the screen switch is on Dells)
Could be an inverter problem or a faulty LCD but i doubt it. First thing I'd do is boot with a Live Linux disk, that way you can rule out OS.
www.knoppix.com if you dont have one.
I've had some weird problems with the X's, I suggest the T series though. The T's also beat it in performance.
IBM has an Ebay store which offers new machines and also refurbs (with full warrenty) at decent prices. Check it out at:
IBM EBay Store