I have been researching laptops of this exact description or smaller for the last year. I currently have a Toshiba U205-5002, which has a dual core 1.66 centrino processor, 1 gig of ram, and a 100 gig hard drive. It has XP on it, because I did not like Vista, so i switched back to what was on it when I got it. I love this laptop because it is light, but not so light that the wind would blow it off my lap, the keyboard is not too small, and it has a fingerprint reader. I would recommend it over the new Toshiba laptops because the keyboards on them are very flimsy feeling, and overall they just are not as solidly built at all. I know you have not mentioned Toshiba, but I picked this one out of every option available, and have never regretted it for the last year. There are newer models of this same style, but they all start with u205 and then have a dash and four more digits, the highest being the most recent.
I would never recommend a Compaq or Acer, and Averatec, i'm not totally sure about either. Lenovo makes a good solid laptop full of features. The 12 inch Lenovo 3000 v200 was my next choice, but again, no color options.
A good retail outlet would be microcenter. Here is a link to their location page:
Micro Center - Store Locations
they have Santa Clara(Silicon Valley) and Tustin(Orange County) listed there.
Tech product reviews for cell phones, computers, MP3 players - CNET is a good site to compare models and get reviews and user feedback.