Thanks to Simon Woodward's comments I spent a couple of days checking out QuantumGIS installed on an Asus netbook, and it looks like a good substitute for ArcGIS.

1) Google Earth images can be brought into QGIS and, especially if you have a large screen monitor, the QGIS window can be set side by side with Google Earth, making it very easy to accurately georegister the GE images. Also important, multiple large-scale GE images can be amalgamated using a GDal plugin. At virtually the same time all those geology/geophysical maps that have already been rubber banded into GE can be registered into QGIS as well, ready for 'deconstruction' into individual layers.

2) The drawing of points, lines and polygons, and subsequent editing is also easy to do; but there is no hand-sketch function, lines being defined by the click-a-vertex method. On the other hand, the incovenience of the latter is countered by it being more  economical regarding memory. Polygons can be automatically generated from the general line array layer (don't have to draw polygons), and can be topologically edited; that is, editing a polygon boundary that is coincident with the boundary of another polygon inflicts the changes on both boundaries. The polygons can be copied and paste onto separate layers. (ArcGIS also relies on an extension to do this.)

3) data is stored as ArcGIS Shape files and Shape files generated in ArcGIS and other packages can be loaded into QGIS.

4) Excel files are accepted as CSV files.

5) Point data (bedding, foliations, joints, etc) stored in Excel-like databases can be plotted using geological symbols and oriented according to their azimuth values.

6) The real-time GPS tracking facility linked to a bluetooth GPS sets itself up automatically, and records real-time tracks, and manually selected waypoints; this pleasantly surprised me.

7) It runs with Grass and other GIS products in the toolbar.

8) Shape files can be converted to GE klm files for use in GE.

There is of course the usual crooked learning curve but it was easy to install and I am looking forward to spending more time perusing the value of all the available plugins.  For something that is free and (Elizabeth) ostensibly OS independent I was impressed.  I have never used a MAC so it will be up to Elizabeth and others to let us know if QGIS works or not in that environment.

As indicated by the two Marks, on a global scale ArcGIS has a large hold on the market.  And indeed, we promote it at my University because the Canadian surveys use it, and also because in this respect we tend to hang onto the skirts of Geography departments.  Same problem with ENVI versus Multispec, Idrisi, etc.

Roddy Muir is dismayed at the excuses being put forward by the universities for not teaching digital field mapping -  "It's fine if these guys don't want to teach us how to do field mapping in the digital world, but they need to know that after a few months in our first job we'll be back knocking on their door asking them why they didn't teach us this stuff". Well in as much Roddy is glad to see that the discussion has now moved back to questions about the hardware and the software, perhaps someone else will help in the task of evaluating the suitability of QGIS (+ Grass) as a substitute for ArcGIS - why is it inadequate as a step towards geological mapping in the ArcGIS world.   All the above notwithstanding, a portable computer is still needed. However, as far as I can see a cheap netbook with an EtTrex GPS, gridded hardcopy and notebooks as backup, might be quite adequate for the cash strapped.

A final point, the department of Earth Sciences with which I am associated (I am long retired) no longer provides training in ArcGIS - we have moved that responsibility onto the shoulders of geographers. Important to add in this respect that I have attended the courses provided by our Geography dept, and while they undoubtedly provide students with a good introduction to ArcGIS, the fact that geography GIS is so very different from Geology GIS means that the ArcGIS instruction provided to our students remains, to be kind, somewhat inadequate.  

Hope this helps.

Bill C.