Comment dude you're getting an old dell (Score 1, Interesting) 423
I just cleaned up an old Dell Latitude D410 for my 7-year-old - reinstalled an old copy of XP and it works great. It was a leftover from my wife's work. Battery doesn't work but I figure that's a good thing since I don't really want him taking it around with him any old place - just at his desk and for very limited blocks of time.
As for software we've been enjoying MIT's Scratch. It's a great programming environment for kids that he really loves to play with. He can actually manipulate graphical sprites with sounds, move them around on the screen, and encode logic using a graphical lego-brick-style metaphor.