Depends on what you want to do with it. If you're using it for Office, Email, Web, etc. then either would be fine so I'd probably go for set-up 2. If you need raw CPU power then go for set-up 1. You can always up the memory on option 1 (assuming there's free slots) and this won't cost you too much if you buy from someone like Crucial.
It all depends on what you want, what you like the look of, which lasts longer on battery, which is the lightest, etc!
If given only those two choices and no ability to tweak the options I'd go with setup 2. My reasoning? 1GB of ram will get me by on everything (save my occasional gaming). Disable the virtual memory as laptop hard drives aren't that great to begin with. 1GB is today's minimal amount of memory (while corporations will still sell junk with as little as 128).
The other options I don't know much about. Cache can make a big difference on some things. When I was crunching access logs my 2GHz socket 754 with 1mb cache seemed to go faster then my 939 running at 2.2GHz with 512Kb cache.
For the most part a computer (regarldess of it's medium) should always be tailored around it's intended usage.