It's not really a GPU. Onboard GPU's merely share memory with the computer itself, therefore if your computer had 2Gb of memory (2024mb), and the onboard GPU uses 256mb, you're computer would be left with 2024-256=1768mb of system memory (~1.72Gb). That, and onboard GPU's are far less weaker than stand-alone GPUs in terms of raw processing power.
Previously stand-alone GPUs (9600GT) were only worth it to gamers. However, Snow Leopard will allow the system to offload work to the GPU - as if the GPU was a second processor. This will make GPUs invaluable to almost any user that will need semi-intensive CPU processing.
Performance wise, the 8600GT>9400M, but I wouldn't say by a longshot. Google for benchmarks.