If youre willing to consider a Mac, you can do what I did when I bought Macs for relatives. I went on eBay and bought used 1999-vintage G3 iMacs for about $150, including shipping. I installed OS X 10.3 (Panther; not the latest Tiger, although that should work too; I already had CDs for Panther). These come with built-in monitors (not big, but sharp), and most sellers include the keyboard and mouse. Chances are youll want to replace the mouse with a 2-button/wheel mouse, just make sure its USB.
My G3 iMac search criteria included the following:
1) 400MHz or faster. The slower iMacs dont include FireWire, which is much faster than the USB 1.0 these older Macs have. FireWire is good if you buy an external hard drive, external DVD drive, or if you want to connect to another Mac with FireWire in Target mode. The last two iMacs I bought were 600MHz, simply because they were faster (I had previously bought 350MHz and 400MHz; they worked fine but I sold them) and because they were flying under the radar: they werent being bid up to their value relative to the other iMacs. And you really want to avoid the old tray loaders (< 350MHz). Just too old.
2) CD-RW is a Good Thing to do simple backups; otherwise, you just have CD-R.
3) 1GB of RAM minimum. The ones with less RAM (256MB, typically) are cheaper, but not enough to make up the cost of buying new RAM. If youre set on 1GB, then its cheaper to buy the iMacs that already have that much memory. You can get by with 512MB, but I wanted 1GB.
4) I only bid on Macs that were being sold by someone with a feedback rating of 97% or better, and with at least 100 sales. I wanted some confidence that I wasnt dealing with a rip-off artist.
5) I read the descriptions carefully to ensure that all of the hardware features (Ethernet, Firewire, CD drive) worked. There was no need to buy a Mac with a damaged screen when there were so many others to choose from.
I own an iMac G5 at 1.6GHz. When I was setting up the 600MHz (or even 400MHz) models, I had no problems with speed or sluggishness when doing things like word processing, email, and general internet access. I suppose they must have been slower for some tasks, but not that I noticed; I think the bottlenecks are elsewhere (connection speed). The thing about OS X is that the OS version has more of an affect on the speed of routine operations than the processor speed does. 10.0 was a dog, 10.1 was better, 10.2 (Jaguar) was much faster. With 10.1, magazines used to recommend using at least a G4 Mac because the G3s were too slow. When 10.2 came out, a G4 was no longer necessary; 10.2 was that much faster. And 10.3 (Panther) is faster yet. I dont know how fast 10.4 (Tiger) is.
But, for getting your feet wet, its amazing how good those old G3 iMacs are at an amazingly low price.
I recommend this book for getting up to speed with OS X:
http://www.amazon.com/Mac-OS-Missing-Manual-Panther/dp/0596006152/ref=sr_1_1/102-1601696-5016115?ie=UTF8&s=books&qid=1173207268&sr=1-1Note that you want to get the version of OS X Missing Manual that matches the version of OS X you are using. My link shows Panther, but if you use Jaguar or Tiger, youll probably be better off with those versions of the Missing Manual. David Pogue is an excellent Mac author.
I expect that starting with maybe OS X version 10.6 or 10.7 that the G3/G4/G5 iMacs will no longer be supported. But, for $150, you cant go too wrong. You can always make it a dedicated internet terminal, and get a newer Mac for other things. Or, you can sell it. Local buyers arent as astute as eBay buyers, and you can put an ad in your local paper and possibly get more for it than you paid on eBay.