Apple building a sub-$600 iMac.

[Hammer]

2) A $500 Mac would be an incredibly competitive machine for anyone wanting a new machine but but doesn't have $1000+ to put into it. (Most "Gateway/Dell/commercial" machines run $1000+ by the time you add in any extras).

$500 USD is a reachable price target for the PC world e.g. HP's SR1000Z* and SR1010Z** series barebones configured (1).

** K8 Sempr0n 3100+ based.
* K7 Sempr0n 2800+ based

Notes.
1. Spec similar to

"256MB of RAM, one FireWire 400 port, two USB 2.0 ports, 10/100Base-T Ethernet, DVI and VGA with dongle, a 56K modem, and a low end graphics card"

[Hammer]

The Macintosh is the only system which could even pose any sort of challenge to Microsoft's dominance on the desktop.

In actual reality, Apple's Macintosh system is not a real "threat" i.e. inferior distribution infrastructure model.

[Hammer]

4) As someone said (perhaps elsewhere) a $500 Mac "would be the perfect commercial platform for companies, government offices, etcetera" because they wouldn't have to have a full staff of high-paid Windows supporting geeks

This is an obsolete IT support model e.g. major Australian companies *out-sourced* their IT support activities to third parties.

Secondly, Linux desktops (mostly X86 PC based) is another factor to consider in the corporate PC world.

There’s more to it than the PC HW + OS solution in the corporate and government world i.e. legacy MIS (managed information systems) and knowledge based systems applications.    

to rebuild machines when the end-user did something stupid (like removing himself, admin, and everyone else from the system permissions). Macs, and in particular, OS X has been proven to be far easier to support.

Refer to http://www.macfixit.com as examples to MacOSX's related issues.