That is a hard price point to hit in a notebook that small. At least with newer notebooks. You may be able to find a Fujitsu Lifebook P series for that price. It is a decent notebook, and a much better price than the Sony T or S series. You may also want to take a look at Averetec notebooks. I personally don't care for the white color of their current line. But maybe white notebooks don't bother you. Lastly if you don't necessarily need Windows, Apple has some decent 12" models in both the iBook and Powerbook lines.
Things you should think about, anything less than 12" is probably going to use a lower power processor, so it will usually be clocked slower. Most of the sub-notes use an integrated graphics controller with shared memory. There are exceptions in the 12" range, but I don't know of any below that size range.
You should try and find a notebook in the size range you want and type on it, as the keyboards can be cramped for some users.