Don't get 'too much' for them at that age
One thing I would keep in mind when buying a laptop for a child - especially one that's still not a teenager yet, is what are you planning on letting them do with it. If its just simple stuff, or if they 'absolutely have' to have the latest games on it. A few points - one) many of the new games coming out, even kids games, need surprisingly high requirements, so maybe check out what it requires at the low end. I doubt you'll find a bargain laptop with 256megs of video ram and pixel shader and tons of ram and 6 gigs of hard drive space without spending close to a couple grand, and then you're better off just getting them a DS or a Wii LOL
two) once you know what programs you want them to have, find a system that would match it. Now remember that you can get by with a lot less than the requirements.
Since the kids you're buying them for are still pretty young, your best bet is to go the used route. At that age, a laptop is still a 'toy', so you'll more than likely have to clean cookie crumbs, juice, milk and possibly un-determinable goo from it. Would you want to give them even a $500 bargain system if it'll get bricked in a few months - doubtful. So troll eBay or Craigslist or whatever site you happen to like. I would stay in the $50-200 range. I'm doing this post on an IBM Thinkpad T22 that I got on ebay with a DVD/CDRW and wifi card and 2 batteries for less than $200. And it runs at 900mhz, so its still plenty to run XP Pro, Office, Photoshop, even a few games that don't require huge video ram.
They still have at least 2-3 years before they get to the age when they feel like they need 'more power' or something 'cooler'. As long as you have a DVD drive, wifi card (since hey why do you need another cord in addition to power messing up your life?), and at least 2 usb ports or a hub so you can plug in an external mouse and/or keyboard and possibly a joystick. Kids don't want to play a game that requires keypads. I know when I was a little kid playing on Apple ][e's and having to use the keypad was really boring. At least 256 in ram and a decent hard drive, at least 10 gigs. As for monitor size, big is good, but you can find a 13.4" screen model far cheaper sometimes. And its easier for them to pick up and carry or for you to stow in a computer case with your own 'nicer' computer if you so wish. I know in my basic Targus case, I could carry a larger Vaio laptop and this Thinkpad (or the Thinkpad and a Canon slim scan scanner) in the same case.
Now for OS - Mac is pretty easy for kids, and they like the colors, plus if their school is all Mac, then its a big plus if they have the same Operating environment at home. But used Macs hold their value more than their PC counterparts. Even now a 400-500mhz Mac PowerBook will still fetch more than $200 and that may or may not include a DVD or CD-RW drive. But if they're using Mac programs and are learning on Macs, then its worth it to keep that going at home. If their school is running XP or Vista, then yeah get a Windows machine.
But just don't spend more than a couple hundred on it. Laptops are not nearly as robust as a desktop and in the hands of a child, could easily die in a short time. So the less you spend the better. Besides, if you find the right seller, he/she may even give you a deal if you buy more than one. If you've got two kids, then I would really suggest two laptops. Preferably identical or close to it. Or they're going to be playing tug of war with it. So look for a laptop that 'feels' sturdy, don't go necessarily by brand, each is put together a bit different from model to model. But if you can, look for something designed for business/corporate users as they sometimes have more rugged hinges, casings and are intended to be used and abused a bit. Wouldn't be a bad idea to get them to equate "laptop" with "glass". Kids CAN be extremely careful if they want to be. But still going the used route means that even if the kids did break something on it, its a used laptop, you didn't invest lots into it. And hey buying a used laptops keeps them out of landfills and lets them enjoy a longer operational life! Think green HAHa
And this goes without saying, install a good antiviral and NetNanny like program on it as well. Even if you only let them use it when you're around, unless you keep it locked up, a laptop with a wifi connection is an easy thing for a child to hide away and play with.
But I wish you and your two kids all the best in finding them a good computer. Hope you have fun!
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