Ars Technica has a great back-to-school roundup of budget (but highly usable) computer equipment featuring ways to spend your leftover student loans. I would go so far as to say that this is a nice setup for a high school junior or senior as well, if you're looking to get something that they could use into the first year or two of college.
The setup includes a Dell XPS M1330, a slick hybrid messenger back, a nice wireless USB mouse, and an external keyboard. Dump the keyboard and mouse and get used to a trackpad and reasonably-sized laptop keyboard and you could come into their recommended setup for just over $1200.
Very few people will have anything bad to say about the XPS M1330; I love my MacBook, but if I needed a PC, this little, highly-customizable notebook would be a great choice. The XPS actually happens to be on sale today, as well, and Ubuntu screams on it if the thought of Vista turns your stomach (you can always dual boot with Vista pre-installed). Dell will contribute $25 to the Global Fund to help eliminate AIDS in Africa if you buy the red version.
By the way, for the same price, you could have a very nicely configured MacBook. HP's Pavilion dv2700t is another great choice in the thin-enough-to-schlepp-around-school-easily-but-not-ultraportable-and-ultra-expensive category and is offering a free upgrade on the base model to 2GB of RAM.
Enjoy the student loans now, folks...payback's not much fun.