I have a 1.33GHz 12" PBG4 which I've upgraded to 1.25GB (max) RAM. It runs Leopard quite reasonably as well as productivity apps such as Office 2004, iWork, Nisus Writer Express, etc.
My oldest daughter (9 yrs old) had been using it for web surfing and such, and when I decided that my MacBook Pro simply had too big of a footprint, I began using the 12" PB again. Its really nice, and I'd probably still be using it except I need Windows compatibility and Virtual PC just doesn't cut it (periodically need dual screen extended desktop, which VPC doesn't do). But the size is still fantastic.
So in the end, it was a MacBook for me, but like most older Macs, the 12" PBG4 is still a great machine.