Unless you really want to spend £700 you can pick up a decent laptop for around £400. My main rules of thumb are to steer clear of Intel Celeron and AMD Sempron processors, and 3 - 4Gb would be my minimum recommended for decent Windows 7 performance. Other than that, for the purposes you're giving, any mid-priced unit will be fine - just get as much bang for your buck as you can justify spending!
If you're planning Skyping then I'd definately go for one with a webcam built in, also if you have a mobile phone with camera / Bluetooth / MP3 playing facilities, then a laptop with Bluetooth capability will allow you to download photos from it, & upload music to it, with relative ease.
http://www.ebuyer.com/product/186603 - has both webcam and Bluetooth, as well as a multi-card reader, and supports the current 'N' standard wireless networks to boot. Quite a nice machine.
I will also say that a 3-year old laptop should still run fine but it will depend on the processor and if it's Vista it should have at least 2Gb memory. If your current one fits these criteria and still runs slow then maybe doing a factory restore would do the job, if it has one of those processors and/or less than 2Gb memory then it's more understandable.
Hope that helps.
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