Just thought id add that my macbook works fine...does everything its supposed to, and more. and it ROCKS! 
...My friend's father (whos MacBook this is) is a manager at Fujitsu, and will help us along the way...
To the OP:
Your best chance actually might be an email to sjobs@apple.com. Instead of threatening legal action, just go over the heads of the people you're talking to if they're being unreasonable. Most who go that route and have any sort of reasonable complaint end up with a replacement computer very quickly, sometimes with some extras but certainly with star treatment. Sounds like you did get someone very unreasonable, and that you need to pass that along to someone who really knows what they're doing.
To all of those blasting the MacBooks, though, the failure rates on the MacBooks are far better than iBooks were from my experience as a tech, and Apple's Quality Control is still the best in the industry. Those are really very poorly educated claims, based solely on poor personal experiences and not on any sort of traceable data. Apple's QC hasn't suffered lately, there's simply more of them and those who get bad ones are always vocal (I think the problems is worsened by the number of switchers with unrealistic expectations).
jW
Read the entire thread. They already sent an email to that address, and are dealing with a very high level employee. It's really rather surprising how this has been handled, and I think at this point they are absolutely correct in turning to legal means when their repeated attempts at reasonable resolution failed.
I don't know - something smells here. Yes, they've had a lot of problems, and Apple refuses to replace it, but we haven't been told Apple's reason for the refusal. Maybe they dropped it in the toilet at some point. Most people end up getting a favorable resolution if they have a legitimate bitch. Or maybe It's just my normal skeptisism rearing its ugly head . . .
. . . This is a totally legitimate case and you have no reason to doubt it...
The Rev. A Core Duo MacBook is a pile of junk.
Totally correct. I am going to say this....the MacBook is crap. Now that is just my opinion, but it is very crappy laptop. It is poorly made/designed and like you said above, uses cheap parts to keep the costs down.
What about the iBook G4s which had "non-Industry standard" parts (PowerPC architecture)?
Read the entire thread. They already sent an email to that address, and are dealing with a very high level employee. It's really rather surprising how this has been handled, and I think at this point they are absolutely correct in turning to legal means when their repeated attempts at reasonable resolution failed.