I still use my 6? year old core 2 duo macbook to write iPhone apps, I used it for C++ and python programming less than a year ago. It worked fine. If you have huge builds ( think linux kernel ) it might take a little longer, but for most of the stuff you'll be doing with respect to programming, it should be way more powerful than you'll need and you won't notice the difference - when builds start taking too long, use your browser.
I've used it for illustrator work as well, for some simple ( < 10 layer, 500 x 500 px ) graphics, never had an issue. I think mine has 1GB or 2GB RAM.
Unless you really need a mac though, you could pick up a netbook to do programming and mail, surf, etc. That would be in your price range. Probably would even do the design stuff fine too - at least as well as my old macbook.