AppleCare Protection Plan for MacBook Air/MacBook : since it doesn't come with a default warranty, i have to buy the applecare myself.
Wrong. It comes with a 1 yr
warranty, like the Dell and just about every other PC out there.
Apple Mini DisplayPort to DVI Adapter
Mini DisplayPort to VGA Adapter
Unnecessary items. I can see adding the VGA for comparison since the Dell has a VGA port, however, most users don't need, won't buy, and won't use one. Adding the DVI adapter only serves to increase the price of the Mac since the Dell doesn't have one either.
But wait, the Dell includes MS-Works, the Mac doesn't. Add iWork to the Mac for $49. An even better comparison would be to add MS-Office Home and Student to each, which would lessen the advantage for Dell, but I'll skip that for this comparison.
That changes your comparison to Mac @ $1523+tax vs. Dell @ $1119+tax, = $404+tax difference. Yes, the Dell does have a faster CPU and a larger/faster HD (of course, with Vista, it will need both), but your $700 price difference is actually only $400+tax.
For the typical consumer, that could be a valid comparison. However, the typical consumer, especially a budget conscious consumer, probably wouldn't buy the 4GB upgrade for the Mac and 2GB on a Mac is fine for a typical user. They also wouldn't likely buy the 250GB HD upgrade. So a more realistic comparison is Mac @ $1348+tax vs. Dell @ $1119+tax (Dell doesn't offer less RAM, a slower CPU, or a smaller HD on the Studio XPS 13). Then again, if we're talking about a really budget conscious consumer and the $229 difference was an issue, they would price a comparably equipped White Macbook @ $1074+tax, which is $45 less than the Dell.
Of course, the really budget conscious could go with the Dell Inspiron 13 for $783+tax, but if you've ever used Vista on a machine with only an Intel GMA X3100, you know that's painful.
Since Apple and Dell almost never offer machines with the same CPU, chipset, GPU, RAM, and HD, it's virtually impossible to compare identical hardware (excluding the vendor designed components such as case, battery, keyboard).
None of the above are truly comparable hardware and software, but they are representative of what people actually buy. The Dell is cheaper in all but one case, but the difference isn't anywhere near the $718 the original poster claimed.
All of that is without considering that Mac OS X is full featured with connectivity to business networks, etc. will Vista Home is limited. While it might not make a difference to a typical home user, Mac OS X is more accurately compared to Vista Business or Vista Ultimate, and that alone accounts for $100-$150 of the "Apple tax" when comparing to PCs with Vista Home Premium.