Laptop replacement for a student? Could a Tablet / Keyboard be the answer?

Hi Everyone, here is the basic question;

On a budget of up to around $500 - $650, are there any tablet / keyboard docks that can easily replace a laptop without reducing productivity?

So first my situation:

I am currently an intern and in around 7 months I will be heading back into student life for my final year at university. My internship supplies me with a laptop, a Lenovo T61, which is an old core 2 duo system, which is sufficient for my laptop usage; word processing, email, web browsing, some simple games that don't require dedicated graphics and spotify. I also use a HTC sensation as my smartphone and have a i7 desktop system at home for more demanding tasks. Budget is around $500 - $650, and I would prefer to have it before the end of January.

The question:

Is a tablet with a keyboard dock a suitable replacement for a laptop considering my usage? The main question for the forum users is what is your experience of using a tablet with a hardware keyboard, are there decent apps for word processing that are comparable to say MS Word or Google docs on a windows x86 system and what are some good products on the market for this kind of usage model?

Current ideas:

I would prefer to stick with android if possible, as I already have a few paid apps that I enjoy using. I am looking at perhaps getting the transformer prime with a keyboard dock when released, but i am open to other products and ecosystems, basically whatever offers the best productivity and ease of use.