yeah you can upgrade them, but its oftenly 2-3x more expensive than a desktop - and i wouldn't try it yourself unless you know what your doing, because they're not quite the same to reoutfit as desktops either, not much on them is just plug and play (which is why very very few places sell anything except HDDs for them)
oftenly graphics chips arn't upgradeable though, what you start with usually is what your stuck with ... most common is Radeon Mobility so you should be oki with that, but there are a good few GeForce Go! out there and there are a few with GeForce4 Go! now - which is the same as the 4200 only slightly less speed (heat reasons)
i could give you the link to where i get my notebooks, but they wouldn't be within your budget
Tsu'va Oni Ni Jyuuko Fiori Sei Tau!
One block follows the suit ... the whole suit of blocks is the path ... what have you found?