.. but I have no clue where to start.

I don't use it for gaming. Mainly just for entertainment (music, movies, etc), chatting, voice calls, and browsing.

Any suggestions that are a reasonable price? (I'm in Canada). Any thing I should stay away from?

Should I wait until windows 7 comes out?

The real question is WHY.
Desktops offer so much more in the way of upgradablity as opposed to laptops .
You have an hardware issue with a laptop and you are basically stuffed.

Downsizing where I live and I have no real room for a computer. That, and I use it for minimal things. It's more of an eyesore in my place.

Just from personal experience, I would not suggest Acer laptops

With laptops also, you NEED to get extended warranties, something goes wrong, many times it would be cheaper just to purchase another laptop (depending on issue)

As mentioned above, desktops are easy to change out hardware and updgrade - not so much with laptops

Several manufacturers have small format desktops that are about 1/3 the size of a normal desktop. The advantage of a laptop is mainly portability. If you want something for entertainment purposes you will get much more bang for your buck from a desktop.