I disagree with some of the other posts here. That's not a bad price if you are getting the CDROMs for the included software: XP Pro, Office, and Photoshop. If the seller is not including the CD's, how will you be able to re-install if you ever have a system crash? If it includes the CD's, make sure you get the product code keys needed to install the software.
Also, I would check with Dell if the batteries for this unit are still available and how long they are likely to remain available. Laptop batteries usually cost about $100, so you might want to pick up a spare if they are still available. You might be able to find them cheaper on eBay.
I'm not a big fan of Celeron processors either, but if your intended use is mainly word processing, spreadsheets, or surfing the internet, and it does the job, then why spend money for more than you need? All the other specs look OK to me if that is how you plan to use this PC. On the other hand, the processor is generally the one thing that you can't upgrade in a laptop, so you may want to look around a little more for a laptop with a more capable CPU.
Finally, I am of the opinion that you should stick to one of the name brands when it comes to laptops. There are many fly-by-night outfits who put together cheap laptops and then are out of business when you need repairs or support. At least if you stick with Dell, Compaq, HP, Toshiba, etc., you've got a fighting chance of getting replacement parts and repairs if you ever need them.
Good luck with your laptop purchase!