Laptops can be a tad trickier to set up with linux because they often have non-standard parts which means linux won't
necessarily 'just work'. That said there are quite a few laptop options available today - not least Dell who sell an Open Source £330 laptop with Ubuntu pre-installed (so it
does work out the box).
In answer to your questions:
1. You'll have to install a driver ('libdvdcss') to watch DVDs, but it isn't a problem. There are instructions all over the internet and with K/Ubuntu I could tell you what to do. Takes about two minutes. (or you could use VLC - this is also available for windows if you want to test drive it before committing yourself to linux).
2. Playing with JPEGs is no problem. There are various paint and photo packages around. GIMP is a bit like Photoshop (only free). That's also available for Windows if you want to try it out. Burning to CD or DVD is no problem either.
3. USB modems aren't guaranteed to work. You will make your life simpler if you access the internet through a router (either ethernet or WiFi).
4. OpenOffice is a bit like Microsoft Office so that's fine for word processing. There are lots of good programs for this kind of thing. Might be worth Googling your printer to see what linux support is like, but many manufacturers have produced linux drivers.
Ubuntu is often considered one of the friendlier linux versions - and I think there is some truth in that. One of the things to get used to with linux is that you can install different 'desktop environments' which change the way you use the computer. The two most common are Gnome and KDE. The choice is entirely personal so you can install them both, try them out, remove what you don't want. Ubuntu comes with Gnome installed, but you can easily add KDE (making it into 'Kubuntu').
Software is typically installed with a software manager which connects to 'repositories' on the internet. It gives you a long list of software and descriptions (so you could just search for a word processor and it will give you a load of options). You just click to select what you want installed or removed.
Gosh that was a long message!
