I went for the XE-G4. But having said that, unless you are planning on doing some heavy number crunching (and until apps start to use Altivec) a G3 @ 600MHz should suit most poeple. It will allow you to surf the net with easy, make up letters and spreadsheets and should be more then powerful enough (so i am lead to belive) to play DVDs with.
The actual reason I went for the G4 is soley because I never couold afford an A4000 when they first came out, although I wanted the "top of the line" Amiga I had to settle for the A1200. Now I can afford it and want to have the TOTL AmigaONE that I wanted as a teenager.
I have realised my dream as it were ;-)