What would be minium requirements that A OS could competitor in mainstream market. That just in theory.
Hardware could be something like 600mHz, with cpu caches and with proper drivers. Video coding done by GPU.
Software needed is office suite, with possibility to use and save MIcrosoft office docs. Modern Web brwser, with suppor media streaming, working youtube etc.
Versatile selection of games, sport, driving, fps, rts etc, maybe couple of games for childrens.
All that could done with reletively cheap Digi TV box, wich has PPC cpu and other needed parts. Price less than 200€
Lack of latest graphical triks would be possible bypass with talented graphic designers. Like in old days, there are amazingly good looking games with 32 colors in 320x200 screen.