1. Should I buy XP or Vista (duh)
The main reason you should want to get XP rather than Vista is because it costs less and runs better on lower end hardware. If you buy a laptop, it will most likely come pre-loaded with Vista and due to some driver issues, XP may not be compatible with it. Vista runs fine, very little difference to XP when you have a decent dual core system, and I must stress than to get a similar experience on Vista and XP, you do not need anything more than a 500$ dual core, futureshop PC with an upgraded video card for games.
2. What other specifications should I watch out for when purchasing the computer?
For gaming and making games 3D modelling, etc, I suggest you get a laptop with at least 3gigs of RAM, which is standard on mid-range models, a dedicated video card (not shared) - from Nvidia, I'd say anything better than an 8800 would do the trick, and from ATI/AMD anything better than a 3850. (The higher the model number the bettter - usually). Anything better than Pentium dual core such as Core 2 Duo T5550, is fine, since getting a faster processor for the same laptop usually costs quite a bit. For a laptop 250gig or more hard drive is fair.
3. (optional for bonus points) How do I get the best deal?
To get a good deal you have to know what you want first, then usually major retailers such as Best Buy will have decent sales. You can also try ncix.com or newegg.com.
http://reviews.cnet.com/best-laptops/?ta...
Cnet does some pretty decent review of laptops and other electronics.
http://www.notebookreview.com/
http://www.laptopreviewsonline.com/
are also good sites.
4. Personally, I would not buy and use a laptop as my main computer. I'm using a custom built, Core 2 Quad Q6600, 4gigs ram (64bit Vista to be able to use more than 3gigs), triple 500gig WD HDD, 8800GT, Blu-ray+HD-DVD, all overclocked and aftermarket air-cooled. You can get this rig for about a grand now, with a better CPU and vid card, and even more ram, and that shall I say, is way more than enough to play UT3 and for multimedia usage. I recently also bought a new laptop for university, an Acer Aspire One netbook with XP, 8.9" WSVGA for only 420$ plus shipping, and since it's for school, I only need it to run MS word, powerpoint, read PDF's and go online with a battery that lasts up to 7hours, which this does way better than an iPhone or smartphone and it is also way more portable than a regular sized laptop. Honestly, for a grand...you cannot really get a decent laptop for gaming or design, so unless your planning to buy a desktop replacement laptop that weighs 9lbs with dismal battery life, for at least $1500, I suggest getting a desktop for power usage at home and a netbook for light work and internet on the go.
Lastly - for those who said Vista need expensive hardware... that is completely untrue - 4gigs of DDR2 800mhz RAM can be bought for as low as 40$, a 500gig HD for 80$, a geforce 8800GT for 130$, q6600 or E8400 for less than 230$ or E7200 for 140$, plus decent motherboard with wifi 130$, case +psu 100$, windows vista premium oem 130$, so for less than 900$ or 800$ before taxes, you can get a pretty beastly desktop (add a 22" monitor for 200$ or 24"for 350$), whereas something like this on a laptop would be at 1500-2000$ easily.