Refurbished iBook can be cound at the online Apple Store for $799...
I think Apple would discontinue an iBook model when it's too "cheap" but maintain similar prices with upgraded iBooks. For example, iBook 700MHz is no longer offered... Apple could have kept it and sold it at $600-700 price range but they discontinued it instead.
So refurb might be the only option to get an iBook at the price range you are looking for. In fact, the refurb iBook is a 700MHz. There's a good chance this isn't really refurb - could be just leftovers.
By computer time, end of this year is quite a bit away. I'd start looking what's around in October.
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I personally don't think Macs are overpriced, compared to PCs. It's just that the product offering is not as wide, meaning Apple really don't cover the dirt cheap computer market. If you compare similar products (not just hardware specs... software/apps/OS are part of the computer too), especially laptops, Macs are very competitive with PCs.
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