Why Duo? Because Windoze Vista personal version will not run on 64 bit architecture, only the business version will for a few hundred $ more, sound familiar !!
Where did you hear this? It's definitely not correct. You can run any 32-bit version of Windows Vista on a 64-bit processor. A dual-core CPU counts as one processor. That's probably what confused you, or whoever told you that incorrect information. And if you want to have a 64-bit version of Vista, 64-bit versions are available in all versions from Home Basic on up. I wouldn't get 64-bit Vista at this time. It has strict driver requirements and 64-bit drivers are not widely available yet. Also, 64-bit Vista does not support 16-bit software, 32-bit Vista does.
The computer you've described sounds overpriced to me. I don't know what things cost in Canada, but now that the Canadian dollar (loonie?) is almost at parity with the American dollar, I have a hard time believing you can't find the deals similar to what you can find all the time in the US at the big box retailers (Circuit City, BestBuy, Staples, Office Depot, etc.) or online from Dell, Lenovo, and others. I see this in the current BestBuy sale paper for $650 US:
HP AMD Turion 64 X2 Dual-Core Mobile Technology TL-50, 1024 MB DDR2 memory, 120 GB hard drive, reads and writes dual-layer DVDs and CDs, nVidia GeForce G0 6150 graphics, 15.4" widescreen display, Windows Vista Home Premium.
Staples has an Acer laptop with just about the same specs for the same price.
When you get the laptop, you shrink the Windows partition with a tool that understands Vista (be careful about that) and install VL on the free space. You should have enough for both a VL Standard and a VL SOHO partition.
I want the lower processor to demonstrate VL’s speed that was chosen on purpose. Most I will talk to will be at 3+ GHz.
I would go with a faster processor. VL is very impressive on a high-speed computer--as long as the budget allows this.