Good call with xubuntu. I did run it for a while on the Laptop, but missed the features of Gnome, and I found wireless networking is a royal pain in the ass with xfce (you have to do it all from the command line basically, as xfce doesn't have any wireless tools)
If you're doing a install from scratch. Do a 'server' install, then apt-get install xubuntu-desktop. This will save you a lot of disk space as no gnome stuff will be installed.