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Slow CPU (but understandable at this price), too little RAM, no restore media in case you want to upgrade that meh hard drive (restore partitions make laptops almost disposable to most people).

Add on another $60 to get a decent amount of RAM and $90 for a 64 bit version of Windows 7 Home just so you can actually use all 4GB of RAM. And since you now have Windows on DVD instead of relying on a flaky restore partition, you can drop $65 (platters) to $130 (SSD) on a better hard drive.