Sorry for the delay on getting back to you on this.. and for its length, some of which is more concise in ckhalil18's post, but hopefully the expansion will help you understand and feel better about the laptop.
So as you've heard Celeron is the "worst" ...
that is not exactly true.. The Celeron was designed to do only what it was designed to do ... its a low cost, low power, Processor. Calling it the worst, suggests it didn't do the job it was designed for, and as ckhalil18 pointed out, it was more for basic uses, email, web, or what might be termed "light duty".
An example of the wrong "worst" thinking ... you don't buy an unmodified Yugo and expect it to win a drag race against a Ferrari .. But the Yugo *would* carry four passengers ... the Ferrari barely two. The Yugo has its purpose, basic transport of 4 persons, or two persons plus a whole lot of groceries.
So if you bought the laptop with the intentions of general use ... it will fit the bill.. the more media rich you go, the more processing intensive the tasks become, and the more you find the Celeron processor is just not up to the task.
This is why there are different teirs of processors Celeron, Pentium, Pentium Dual Core, Pentium iCore (i3 / i5 / i7) ... in the auto world .. they have a Ford Mustang ... and they have the Ford Mustang GT .. both are fords, both are mustangs, but the GT was designed with a different feature set in mind.. high speed performance... etc..
By now you will understand why that Laptop was at that price point ... there's nothing "wrong" with it ... you're just realizing it was beneath what you wanted or needed, and didn't know it, perhaps not realizing at the time you would get into media rich content movement, or not having a *good enough* sales person explain that kind of thing when making a laptop selection ...
In my case ... my previous laptop died out of warranty, and so came to getting a new one, I knew I needed a certain level of power, and waited ... a decent one went on sale for 499 (100 off normal price) and that was an HP with a Pentium Dual Core processor. My screen is roughly the same as yours, my hard drive a little larger, and I have only 3 gigs of ram ... but mine was 150 to 200 more than yours for that Dual Core processor.
And that was a steal 3 years ago. One of the other key differences, is that the Video Chipset used for my laptop was designed to off load some of the HD functions from the CPU. Even then, the video chipset in mine isn't qualified for Bluray 1080p certification..
http://www.notebookcheck.net/Intel-Graphics-Media-Accelerator-GMA-4500M.20379.0.html
I have the Intel 4500M ... to resolve some of the graphics issues, they advanced to the 4500MHD. Several key sentences sumarize their overall opinion and set the expectation for the chip..
- The mGPU is integrated in the Intel GM40 and GL40 chipsets and designed for cheap laptops
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- The chip itself is capable of supporting the CPU to decode HD videos, but because of the slower clock rate, the 4500M has troubles decoding 1080p videos fluently and therefore has no full Blu-Ray logo support.
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- Compared to other modern integrated chipsets like the GeForce 9400M or the Radeon HD 3200, the 4500M is clearly the slowest especially for 3D games. Still the power consumption of the chip is quite competitive, so it may be the right choice for office tasks.
(don't misconstrue that as saying the intel 4500 or 4700 or any intel chips are 'better' than nvidia or ATI for video, because both nvidia and ati make much better dedicated video chips than intel's, as is mentioned in sentence 3, "other modern" ... GeForce is Nvidia, Radeon is amd/ATI)
So even *I* have issues with some video work.. knowing is half the battle ... the other half is broken into smaller bits of time, money, patience, research, and access. (ie, keeping an eye out for a deal, waiting, access to information and researching, etc.)
Don't be bummed out by it.. just know that you can do other things ... like choose the 480p options when given a choice for streaming content, 720p may push it ... but deliver good enough results.. etc..
Personally I'd love to have a lower cost laptop ... that I could do some "modifications" on and use in my car ... and perhaps thats what will happen to my current laptop when I get a newer one (if I get a newer one).
One last ... when looking at processors .. here a relatively good wiki for intel processors
http://en.wikipedia.org/wiki/Intel_Core
keeping in mind wiki is what it is (user contributed) so it could have some wrong information, but in this case, used as a "generational over-view" of the CORE processor lines.. it helps understand which model is currently "the best" although not for everyone, and what preceeded it. Again Core processor line only so it doesn't include older non-core labeled Pentiums. And the Celeron is (as my car analogy) a "Pentium" processor, just not the fastest.
http://en.wikipedia.org/wiki/List_of_Intel_microprocessors in that link, you can see in the Contents Pane .. at 13.6 they have Celeron's with one of their first incantations (under pentium 3) and then also again at 17.4/17.5 ... the Celeron in general is a "lower" class processor in any set of pentium platform processors. lower in performance, thus lower in cost, which is sometimes not adequately explained or translated into cost savings for the consumer.