Well an eMac has a bit of a niche, all in one thing for the edu market and many users. I am a strong advocate that if they can revamp it with a 15" or even 17" LCD in a similiar all in one design, then it still has a place as both an edu machine, cheap second (third mac) and switcher machine.
Limiting screen size and making it still big (all in one) limits its competitiveness with the new Mac mini and limits its threat to iMac (as well as only having G4).
And using all PC not laptop parts means the price can be kept lower, hopefully even dropping the existing price points to within only $100 USD of the Mac mini prices.
Plus it can have up to a 160/250gig HDD, 2 ram slots, new BT, new speakers/optical audio out, and even a 64meg vram card (finally)...theres plenty of space with an LCD in a design like emac (even if its squished up much like the new iMacs) for all the components and superquiet cooling.