I'm in the market for a new computer, I've got it narrowed down to two choices.  I mainly need it for school and my budget is under $500, I'm pretty sure either of these can handle what is needed for school work.  However I'm not sure about the other stuff I'd like to do on it, mainly watching video's on youtube, and some live streams.  I also would like it to be able to handle some photo manipulation software, like Photoshop Elements 10.  Both of them are HP Pavilion laptops, #1 is the cheaper one I'd be able to buy it in person, I've actually used it in a store.  #2 is from the HP website and is about as expensive as I can get right now.

#1

Processor:  Intel® Pentium B940 Processor 2.0GHz 2MB L3 Cache
Memory:  4GB DDR3 SDRAM (1 DIMM)
Graphics:  Intel® HD Graphics 3000
Hard Drive:  500GB (5400 RPM)

#2

Processor:  2nd generation Intel(R) Core(TM) i3-2330M (2.2 GHz, 3MB L3 Cache)
Memory:  6GB DDR3 System Memory (2 Dimm)
Graphics: Intel(R) HD Graphics 3000
Hard Drive:  500GB 5400 rpm

Both computers come with Windows 7 Home Premium 64-bit have the same screen and optical drives.  If both can do what I want, with computer #2 costing $80 more, is it worth $80 more?  As for computer #1, I can get it on the HP website as well, but upgrade the graphics to a 1GB Radeon(TM) HD 7450M Graphics for $75 more.  The would essentially make it cost as much as #2.  Would the Intel HD Graphics be all right for what I want?
Any Pentium or even Celeron will handle school work... the 4GB/6GB of RAM will come in handy when you open >100 tabs like I do in Chrome for research purposes; my Athlon II computer in my specs grinds to a halt and I have to remember to check my RAM usage every time in Task Manager...
The i3 is beefy enough to tinker around with some virtualization programs, like VirtualBox...

I notice you mention Photoshop; Photoshop supports GPU acceleration which will come in handy when you move to more advanced photo editing... many more mainstream media programs support GPU compute right now compared to a few years back, so it would be convenient if you had a graphics card to greatly accelerate workloads given to your processor. However: http://www.notebookcheck.net/AMD-Radeon-HD-7450M.57211.0.html it's only minimally better in 3D applications than the HD 3000, which already serves your purposes of "YouTube and Live Streams" (It plays 1080p without a hitch) and I can't really justify the additional cost of $75.

I would go for the AMD APUs, which will provide far better graphics and comparable CPUs at far lower cost:
http://shop.amd.com/us/All/Detail/Notebook/LX.RNT02.076?SearchFacets=category%3ANotebook 
That's a quad core A6 for merely $349.99, 4 GB RAM, 15.6'' screen. The HD 6520G in the APU will handily beat the HD 3000 at almost all graphics intensive tasks.
http://shop.amd.com/us/All/Search?Page=5&NamedQuery=notebooksys&SearchFacets=category%3ANotebook all under $450. Take your pick.
I wouldn't go any lower than an A6: the A6 has its lead in multitasking, but in single threaded applications the i3 holds its lead.
http://shop.amd.com/us/All/Detail/Notebook/12992AU?SearchFacets=category%3ANotebook
$449 for the quad-core A8 and a discrete HD 6620G! How will your paltry Intel Pentium B940 system that you quoted above match up in terms of price/performance?
http://www.notebookcheck.net/Intel-Core-i3-2330M-Notebook-Processor.52200.0.html 
http://www.notebookcheck.net/AMD-A-Series-A6-3420M-Notebook-Processor.61302.0.html
I doubt you'd even notice a difference between them except in benchmarks.Transfusion, What a thorough and well stated response to the O/P.Good on you.truenorthcheck this one
http://www.bestbuy.com/site/Samsung+-+17.3%26%2334%3B+Series+3+Laptop+-+4GB+Memory+-+500GB+Hard+Drive+-+High-Gloss+Silver/4707155.p?id=1218512739781&skuId=4707155
$449Transfusion did a great job.  Sorry it has taken me a while to respond.  The information has been very helpful.  I've gone away from the HPs now I've found two more computers that I'd like an opinion on.

#1
http://www.newegg.com/Product/Product.aspx?Item=N82E16834215187

That's for $480, and from the reviews it looks like it can run some games on it which is a plus.

#2
http://www.newegg.com/Product/Product.aspx?Item=N82E16834215258

That's $550, a little over my budget but I could do that if it is worth it.

Is #2 really worth $70 more, all I can notice is a .1GHz difference in the processors.  As for over clocking, is it safe to do?No, the .1 GHz isn't worth $70. You can regain that .1 GHz through overclocking, which won't pose any harm to your system because, well, the $550 machine has an identical body and identical cooling compared to the $449 one. Do note that there is: TurboCORE Technology up to 2.4/2.5GHz which will remove the processor throttle when it's crunching heavy workloads.
The main drawbacks of the systems you picked are the 5400 RPM drive and the 1366x768 screen. Nowadays people are moving to 1080p on 15.6'' screens, and my eyes admittedly feel more comfortable with crisp, rounded outlines (on non HD screens you can see individual pixels, which makes edges jagged), plus there's more space on the screen for you to multitask with.
The 5400RPM drive was probably chosen by the manufacturer because it would consume less power than a 7200RPM one.
http://www.overclockers.com/ps3-hard-drive-roundup-5400-3-scorpio-black-x25-m-g2/ 
We're talking about ~5-15 SECOND difference in game loading times here... In normal productivity you probably won't notice a difference, though.

www.youtube.com/watch?v=Hu0dTDaJdz8
http://slappablog.com/2011/12/08/laptop-llano-sabine-overclocking-guide-a4-3300m-a6-3400m-a8-3500m/
A place to get you started with Llano overclocking. I thought so, it didn't seem like it's be worth it.  I can live with the hard drive and if I really need to down the road I can replace it.    Same with the screen, I'd like the 1080p but I do have displays at home I can use and which I intend to use anyways.  I'd get a desktop but I need the mobility at this point.  Once again thanks for the information it's been a lot of help.Your budget was the same as mine.  You can get one of these:
http://h10010.www1.hp.com/wwpc/pscmisc/vac/us/product_pdfs/HP_ProBook_4430s_4530s_Notebook_PC_Datasheet.pdf