Your graphics card (or lack-thereof), is what's causing the issue. You need a graphics card capable of the following to use XNA:
http://msdn.microsoft.com/en-us/library/bb203925.aspx[
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"... You need a graphics card that supports, at a minimum, Shader Model 1.1 and DirectX 9.0c. We recommend using a graphics card that supports Shader Model 2.0 ..."
An in-built VGA adapter isn't going to support DirectX 9.0c or Shader Model 1.1 which is what is causing your problem. (EDIT: Just to note, it depends how old your laptop is in regards to if these are supported or not. If you're seeing that error then it means it's more likely that this isn't supported. Newer Laptops with in-built VGA Adapters might be slightly different but this depends on manufacturer and drivers).