We are having alot of problems with our school also, not so much on the budget side of things, but more on everthing else. they require us to have a staff member present at all times, and with only one staff member as a team mentor, it is hard to have him all the time.
Anyway, you can get a decent laptop these days for $500, with a decent sized screen/memory/prossesor. I would stay away from netbooks. (they where only originaly made to surf the net), hence the name, so they arent really that fast on anything else.
with that said, i have talked to some people who have run photoshop CS4 on an MSI wind netbook, so i guess all is possible.