Apple is making a bold competitive move just as the PC is at its weakest. To put it another way, Steve is going for the throat.
This bargain offer is a way for Apple to dabble in low cost computers without hurting the status of their brand. I'm checking out what it takes to qualify as a student ASAP.
The low-end MacBook has only one gig of RAM which is fine for normal casual computer use. However, if you are a heavy user especially of graphics, video or web browser with lots of apps running and tabs open, 1 gig isn't enough.
Other World Computing can fix you up with 4 gigs (a pair of 2 gb modules) for $95. You'll need to handle installation yourself or pay about $25 to your local third party Mac shop to have them install it for you.
Expect Apple to sell a boatload of MacBooks and help their installed base of iPod touches to boot.