With 2GHz Celeron processor, 256MB of RAM and a 40GB HDD, the machines aren't exactly going to set the world on fire. But then, they don't need to.
Available soon, the machines will be priced at $300. There have, of course, been similar offers in the past (Linspire springs to mind) and the idea of bundling a PC with an ISP preloaded is not new. But its certainly a welcome step in bringing computing (and the internet) to more and more people.