A properly configured system comes in just shy of $1000 (edit - $952 is where I got to!)

Imac G4 1.25
HDD upgrade to 80GB
MEM upgrade to 512MB (system has only 1 DIMM? and 1GB DIMM is stupid
expensive)
Optical drive upgrade to Superdrive (you want to burn CDs/DVDs I
assume)
Wireless Ethernet (Airport Extreme card)
Bluetooth upgrade
Wireless keyboard and mouse

Apart from the Bluetooth stuff, that isn't that much cheaper than a
Peg2 (assuming ya could get the lower power 1.25 G4 for a peg) and a
Peg2 is more expandable.

Ya could deduct just about a $100 and go with a wired keyb/mouse

The bonus you get is Panther + iLife '05...which included by default
can already do far more than Peg/MOS can at this point:

1. iMovie
2. iDVD
3. Garageband
4. iPhoto
5. Safari Web browser
6. GFX acceleration including 3D and GL
7. JAVA
8. I'm sure there's more....

[ Edited by JKD on 2005/1/11 22:34 ]