Want it portable? Want it small? FORK OVER THE CASH!
Pretty hard to find what you want under 1k, here are a few I found:
http://www.cyberpowerpc.com/ http://www.vigorgaming.com/
so far both have systems for about $1100 when config with xp pro
amd seems to run higher than intel systems.
Like you said, you can build a pretty darn nice desktop for the price of a so-so notebook.
Then again I am an avid gamer so a $3500 desktop turns into a 7k+ laptop one I configured was closer to 10k and hubby said... ok I am too much of a lady to actually repeat those words!
I also noticed about the only few systems out there that you can configure with win xp pro are gaming notebooks