Well here is a bit of a contradiction - Google is pretty much denying all claims that it is to build a cut price PC with Wal-Mart stores. We are talking here about the rumours of a "fully functional" PC running a Google operating system and costing $200. However, Google has essentially said that it saw no need to enter that market with such a PC. However, rumours still abound that Google is building some form of hardware, although with the help of who remains a mystery.
One device being suggested is a dumb network computer, or Google 'cube' which will deliver music, video and even VOIP calls from the PC to the televisions, stereos and phones in the home. This would be a long way from the "fully functional" PC suggested by the LA Times, but a fair way towards what its hacks were suggesting.