the upgrade you are talking about, even if possible, would be very costly. i think it is impossible, as it may be soldered to the motherboard. For the same amount of money, you can get a brand new laptop with a pentium dual core that will be faster. unsoldering a cpu from a mobo is nearly impossible, and requires very expensive equipment, lots of percision, and is a pita.
I would just buy a new laptop, I managed to upgrade a dell cpi to a PIII, but the processor wasn't soldered and i had another cpx that is the same model but w/ a PIII and better graphics. so, if it is not soldered, maybe (just take the keyboard out and see, usuallly the processor is directly under) but with most old ibm thinkpads, the processor is soldered, if it is soldered, don't even bother, that would be a huge waste of time and money