I recently installed Ubuntu 9 on an IBM Thinkpad (P3, 256 MB RAM) and it ran extremely smoothly. I increased the RAM to 1 GB and now the laptop is flying.
This same laptop had Windows XP Pro SP2 installed before I converted it to Linux. It was quite slow at running Windows XP.
Using Ubuntu 9 provides users with identical functionality as Windows, but without the extortionate cost! Everything installed on the IBM Thinkpad is open source software. I use Mozilla Firefox, GIMP, OpenOffice.org, Evolution Mail, Pidgin Internet Messenger, NetBeans IDE and many more.
Pidgin Internet Messenger allows the user to remain logged into multiple IM providers at once such as Google Talk, Y! Messenger, Windows Live Messenger, AIM etc.
OpenOffice.org provides includes all the same functionality as Microsoft Office including the ability to export documents as *.PDF files.
I believe there are security benefits to open source applications also. A recent example is the release of Firefox 3.5.1 to patch a security flaw. This was quickly spotted and fixed as developers worldwide seek to improve Firefox whereas Internet Explorer can only be patch by Microsoft personnel. It is the same story for OpenOffice.org and Microsoft Office regarding patching of security flaws.
Embrace open source! It's a true recession-buster!!