A bigger hard drive and a new battery are definitely worth getting. It's not exactly a bleeding-edge laptop, so you should be able to find reasonably priced parts for it.
For the battery, you could get a secondhand replacement battery (or even a completely dead one) and replace the cells inside with equivalent new ones. It will be cheaper than a whole new battery, which may push $100.
Unfortunately, from what I've read you're maxed out at 256 MB of RAM.
Internal WiFi, eh? I don't know about that one, does the Lifebook have an internal expansion slot? You might just want to permanently devote one PCMCIA slot to the WiFi card, but hack up the antenna (which is all the external part usually is) and rig another antenna up inside the screen bezel, that way you don't get the bulge out the side. You could also use a USB adapter (cram it inside somewhere), but it's only worth considering if you have USB 2.0.
lifeisbetterwithketchup wrote:internal wifi
fully linux-compatible
I'm trying as hard as I can to not go into a big rant, but in my experience, you can have either one or the other.
To be completely honest, you'd be better off with an nLite'd copy of XP. That way, you know all your devices will work properly to 100% of their capability, and you aren't using half-baked drivers for units that are "close enough" to sort-of work.
HotDog-Cart wrote:Hmm. What you need is to wait for the new EEEpc. (Its going to have a 10inch screen so it would meet all your requirements, other than the eraser head.).
Heck, You could purchase a eeepc now (which has a 7inch screen) and it would forfill all your requirements (excluding eraserhead).
You know you could always get a eeepc, and then buy a 10inch screen and do a little modding to make it portable.
Yeah, the Eee 900 actually looks like a decent little machine.
(I know, I know, "bic's actually got something positive to say about an Eee! Shock and horror!".) It addresses the #1 problem I have with the original: the screen's too damn small. It's only 800x480, which is nowhere near enough for what I need, and doesn't fit the modern web screen size assumption of 1024x768. If it's under $500 I might consider one in a year or so; I like my Pavillion a lot but it's huge.
That's always an option for you, but your Lifebook is almost as powerful, and if it does what you need, I don't see anything wrong with getting it some new parts to last a while longer.
Oh, and
HAPPY McBIRTHDAY!
And I felt the need to make a birthday thread. 
) at school.