I love my Shuttle X27D barebones kit. It is a dual-core Atom system. You can get them for $175 at central computer right now. With 2Gb RAM and 80gb hard drive, you're talking $250 before OS (add $50 if you want a DVD burner in there). Has VGA and DVI out, plus multi-channel audio out. VERY quiet. I can't hear it at all from more then 3' away.

Edited to add:

I got started with the X27D because we make a web appliance based off them. In the original hardware selection phase we were going to build our own, but some of the small form factor cases had such crappy power supplies we had many early problems. In that search, I notice the Jetway HBJC200C91 has the exact same case I tried on the first model (actually, many of the Jetways on that page appear to use that same case). The power supply failed in less than 48 hours. I really felt it was crappy quality compared to the Shuttle, and we ended up paying a premium for the Shuttle before the price came down.