I realise theres a billion guides to setting up Ubuntu on the net already, and I'll link to as many relevant ones as I can. This isn't meant to be a comprehensive step-by-step guide, It's more of a glimpse into whats possible with linux, with the info & links you need to build a similar system.
I mainly want show off what I use, and show others how and where to get the same kind of setup for themselves.

Update 28th Sep '07: I've got my lappy ubuntu setup how I want it now, but rather than expanding this list forever with everything I find thats neat, I'll do updates by posting under the linux tag (look at the bottom of the page). Still no dice with the tv tuner.. My focus is now on getting 64bit Sabayon (gentoo) linux on the desktop beast, and I'll write about this soon..

System: Hp/Compaq Business laptop model Nx7400

• Cpu: Celeron M 430 @ 1.73Ghz
• Gpu: Mobile 945GM Intel integrated graphics
• eth0: BCM4401-B01 100BaseTx
• eth1: Dell Wireless 1390 Mini Wlan (Bcm43xx)
• Storage: 60Gb SATA (Fujitsu MHV2060B) partitioned for Ubuntu, Vista & Shared Media
• Optical: DVR-K17 Dvd burner

Some quick screenshots of my current setup before the nuke:
  

Initial Setup and Updates:
Backed up, wiped partitions and rearranged structure while I have the chance
Drive is now partitioned like so:
Primary 10gb NTFS for Vista
Primary 20gb Ext3 for Ubuntu
Extended 1.5gb SWAP for Ubuntu
Extended 30gb NTFS for Shared Media

Downloaded, Burnt and Booted from the Gutsy Tribe-5 CD image from the Internode mirror. Booted fine, minor text size issue with login screen in this build but nothing serious. Installed and rebooted into new install.

Ran update manager for the first time, and let it auto-download and install 300mb worth of updates to bring the base system up to the latest development versions. This would suck if it wasn't free traffic from Internode.

While I'm waiting on that, I'm working on getting rid of the stock Ubuntu "poo brown" look. Theres an August 2007 Desktops thread on UbuntuForums with some awesome setups for inspiration, and links to themes. Just stole this funky water droplet background to start off.

Initial Panel tweaks: Un-ticked "expand" on top panel, added system and network monitors, set background to full transparency. Left bottom panel as-is, used as a basic task switcher until I replace it with kiba-dock or avant later.

Nautilus file-manager tweaks: I usually go straight to the options and turn down the zoom defaults (75% for icon view, 50% for list) and tick "show hidden files". Next up I add shitloads of scripts to the right click menu to make a hundred or so common tasks quick and easy, using this script-pack. Just extract it, as is to "YOUR HOME DIRECTORY/.gnome2" and they'll show up in nautilus instantly. You can also search for a specific script at G-Scripts.sourceforge.net for more..

Graphics Drivers: My graphics chipset (Intel integrated) was autodetected and worked perfectly out of the box using Gutsy, and if you're using Nvidia or Ati graphics you can now have them automatically set up for you using the Restricted-Driver-Manager found in the System - Administration menu.

Wireless Woe's:
Some Broadcom wireless chipsets have always been a bitch to get working under linux thanks to shitty drivers. This is getting a lot better with the later builds of Ubuntu as more point-and-click solutions arrive. Some variations are now supported natively by the kernel, and just need an updated firmware for your chipset to be downloaded via the restricted-driver-manager tool. Of course my chipset isn't.
The other alternative to native support, is to use a program called ndiswrapper to talk to the original windows wireless drivers. I've found a few good guides, but im still working on it:

FUCK. YEAH. I finally got it working! I tried EVERYTHING, followed a bajillion guides, tried heaps of different drivers and even compiled network-manager and its gnome applet from the latest svn source. When I was right on the verge of giving up, I tried out a kde network manager called "wicd" (install guide)and it instantly spotted my hardware and router :)
Turns out I'd had the wireless driver working for a while, but a bug in gnomes network-manager kept silently crashing it in the background..

Sweet. Sorted. Now I can get back to the guide.

Installing Compiz-Fusion from latest GIT source
Its all about the eyecandy. Compiz-Fusion is the latest merging of Compiz and its offshoot Beryl , and installing this using GIT instead of the usual repositories means you'll be the first to get all the latest effects and improvements before they eventually get packaged and put in the official repo's.

Now, you could do all this manually if you wanted to but I find it a LOT easier and probably safer to use the awesome CF Installer-Updater script here . It automates the entire git download, update, compile and install process. Love it.
I should mention this is a big program, with a lot of dependancies. On a fresh system like mine it can take a while to download and install everything needed before it even starts on the compiz install itself..

I remember first trying compiz early last year some time, and it took me almost a full day of troubleshooting compilation and graphics problems to get it working with its basic effects. The project has come a LONG way..

I may have spoken too soon, I've just used the script to install and all seemed to go well without errors, but when I tried to run "fusion-icon" to kickstart it I get this error:

ImportError: libcompizconfig.so.0: cannot open shared object file: No such file or directory

Turns out it wasn't a showstopper, all I needed to do to fix this was a quick "sudo apt-get install libcompizconfig0" and now it works perfectly :) Just a little odd that this wasn't automatically checked for and installed with the script..

Tweaking Compiz-Fusion
Now its installed, updated and running the first thing I do is use the fusion-icon tray button to switch to the Emerald window decorator, and switch to the "blackline" theme. Dark Minimalism ftw.
Pop open the compiz settings manager ("ccsm") and tweak away!
I've turned on the cube-caps plugin, and set top and bottom faces the same as my background (The water droplets), and found a nice skydome image for the background from Beryl-Themes.org. I ended up using this, a deep space compilation shot of the Orion & Carina Nebulae. I set the scale plugin to bring all windows into view when I move to the top-right and the cube-rotation plugin spins the cube when I move my mouse to either side.

Theres a plugin called Screensaver for compiz that I really like, but it seems to be broken (and disabled) in the git repository right now. I've found a post on ubuntuforums with a working version that im using now. You just download that file, extract, and get to the "screensaver-my3" folder in a terminal. You'll need to have the "x11proto-scrnsaver-dev" & "libxss-dev" packages installed to be able to compile this. To compile and install just do a: "sudo make && sudo make install" and it will show up in the setttings-manager..

Replace the Gnome Window Selector with Kiba-Dock or Avant Window Navigator
Now we finally get rid of the butt-ugly window selector, and replace it with your choice of what I think are the two sexiest selectors on any operating system :)

Avant Window Navigator - Is similar in features to kiba-dock (minus the physics) and feels more a little more responsive to me. I've settled on using the awn-curves branch with this black theme from meek (shown below).

Kiba Dock - Is probably a little overkill, with the physics engine and all, but I like it. Theres bound to be precompiled versions in a repository somewhere if you dont mind being a little behind the bleeding edge, but I like to compile from the latest source code.

Firefox/Swiftfox/Swiftweasel and Flash plugin
Firefox comes installed by default, but prefer the performance of Swiftfox or Swiftweasel. They look and act the same as firefox but I've noticed Swiftweasel loads a lot faster, and is a little lighter on the ram..
Flash will automatically download and install once you view a flash page, this has worked perfectly for me in the past, but this time I ran into a little glitch that made firefox keep trying to reinstall the plugin even though it was working fine. If you have the same problem (missing "midbrowser" directory), all you need to do to fix this is to create the directory with "sudo mkdir -p /usr/lib/midbrowser/plugins" and then run "sudo apt-get install -f".

Another handy tweak if you choose to use swiftfox/swiftweasel is to use the user-agent-switcher extension (or do it manually) and set your user agent to "Mozilla Firefox" and you wont have any trouble installing extensions like google toolbar.

Asus u3000 Mini Usb Digital Tv Tuner
Heres a guide on getting the u3000 mini working on the eeepc :)

Internode Usage Meter
I'm a bit of a download junkie, so its handy having a little icon on my gnome panel showing how much of my download cap I've wasted so far. You can get the usage meter I use here.

RAR compression
The default file-roller tool cant handle RAR compressed files by default, so to add the support just do a "sudo apt-get install rar && sudo ln -fs /usr/bin/rar /usr/bin/unrar".

Screensaver (Or a video, whatever) as your background
Theres a handy program floating around (but not in the official repositories) call "xwinwrap" that basically plasters the output from whatever program you run onto your desktop background. I don't actually use this myself at the moment because it stresses the laptop out too much, but I think its a cool tool worth mentioning. Picture the matrix screensaver as your background, or a frameless movieplayer directly on your desktop..

Easter Eggs in Gnome
I just found this post about hidden extras in Gnome. For a space invaders game type "gegls from outer space" or for a fish swimming free around your screen type "free the fish" in the gnome run box (alt-f2). Pretty pointless and random, but I thought it was neat..