10" led display, 64gb ssd, 2gb ram, at least 1.6ghz dual core atom for $500. I know it's not possible now, but Leopard isn't quite as slower-processor friendly as XP or linux can be, so I'll wait until these specs are possible for the price.
(This is assuming of course that Apple makes it, which they probably won't at $500 unless Mr. Jobs takes back his comment that he can't make a $500 computer that isn't a "piece of junk")