When the power cord is removed from a laptop, the display brightness goes down slightly (very slightly, not a complete "notch").
The interesting thing is, I don't remember XP doing this, it seems to be new with Windows 7.
Already checked the power plan, and set both battery and plugged-in brightness to 100%, so it shouldn't be Windows. Could it just be that the battery can't sustain max brightness on it's own? Or is Windows 7 not fully following the power plan?