The hardware is pretty good, too. It looks like Any Minitower Clone, but doesn't feel flimsy. Speedwise, it felt peppy, better than 800 MHz machines. Even though WalMart was obviously trying to keep the cost down by using a 10 Gig hard drive (of which Lindows only took half a gig!), they included a Sup-R-Cheesy mouse, keyboard, and speakers. Hint to WalMart: if the buyer doesn't need a monitor, they don't need a crappy mouse, keyboard, or speakers. Save the $5.
Booting was nearly flawless. The out-of-box experience was in some ways better than a new Dell with WinXP because no one was making you agree to licenses and so on. The desktop felt just fine even though most X desktop systems feel clunky to me. A Win98 or later user could learn the interface basics in under 5 minutes: it was very familiar without being a rip-off. All programs worked. Help worked. The menus were aimed at users, not sysadmins. A slight glitch was that the box didn't recognize that my LCD monitor needed 70Hz refresh, but that was easily remedied. Until I shut it down and the normal Linux shutdown drivel appeared on the monitor, nothing screamed "designed by a Linux geek" at me. That's Good.
So, I'm happily impressed with the state of Lindows. Other Linux distros would do well to spend the small amount of cash and study this box intensely. Microsoft still has nothing to worry about with this, unless Dell or Gateway or HP/Compaq gets any funny ideas.
But, given the low cost for the whole package (heck, shipping and CA sales tax still only brought it to $230!), every no-name or nearly-no-name clone maker should be very, very worried.