CPU Uptick Intel's new 500MHz Pentium III CPU isn't the only new game in town. The chip maker recently unveiled its 400MHz Celeron processor. More chip choices mean even more competition for your dollars. Look for affordable new systems based on the chip from Compaq, Dell, and Hewlett-Packard first.

No Name, Please Everybody wants to sell to small businesses these days--just look at the enticing leasing deals and special services (including support and backup) companies like Dell, Compaq, and IBM now offer. And they've got good reason: While Dell and Compaq have the biggest share of name-brand sales, most price-conscious small offices are choosing value-priced PCs from no-name clone makers.

Return on Investment With system prices at an all-time low it's tempting to set up a workgroup server on the cheap. But it pays to spend a little more up front. Forgo a plain-vanilla Pentium II box in favor of a dual-processor system. Our top pick, the Compaq ProLiant 1600, pays for itself in about eight months, whether you're running a 12- or 52-client network. That's a savings of more than $6,000 a year!

Buyer's Checklist: Low-Cost PCs

Memory Don't skimp--memory is at an all-time low. Insist on 32MB at a minimum.

Graphics Does that low price include a monitor? Better double-check. Also look for a system with 4MB of video RAM instead of just 2MB.

Processor You don't need a Pentium II; basic business and home apps run fine on a 266MHz Pentium, K6, M2, or Celeron processor.

Modem Many sub-$1,000 PCs cut corners here. Make sure yours comes with a V.90-compliant 56K modem.

Editor's Picks

State-of-the-art Desktop PC

NEC Direction SP B450 What's not to love? The Direction SP B450 is fast, loaded, and affordable. NEC starts with a 450MHz Pentium II, adds 64MB of RAM, IBM's speedy 14.4GB hard drive, and tops it all off with a 16MB Diamond Viper AGP graphics card. NEC even includes a modem or network card so you're ready to make the right connections.

High-performance PC

Dell Dimension XPS R400 Here's a good reason to jump on the e-shopping bandwagon. Configure your own Dimension XPS R400 at Dell's excellent Web site without once talking to a salesperson--unless you want to. Choose a 400MHz system that's loaded with 128MB of RAM, a 14.4GB hard drive, an STB Velocity 128 graphics card, a DVD drive, and a Zip drive.

Desktop Workhorse

Gateway E-3200 450 It's the Volvo of the computer industry. This 450MHz protable is designed for speed and safety, with a built-in network card and smart management features like a tool-free case and a slide-out motherboard that accepts any Pentium-class chip. So you can roll out these puppies to your staff and let them fiddle away all they please, comfy in the knowledge that a quick repair will just take seconds.

Low-cost Desktop PC

Microworkz zPCPocket change--that's all it takes to buy a fully loaded PC. For budget-meisters, the Microworkz zPC is the best deal going. Less than $600 gets you a 300MHz M2 CPU, 32MB of RAM, a 3.2GB hard drive, a 12X CD-ROM drive, a 56Kbps modem, a sound card, speakers, and a 14-inch display.

Soho System/Home Entertainment PC

Sony VAIO PCV-E308DS Santa was good to you and brought you a digital camcorder. Now you need the perfect PC companion: the Sony VAIO PCV-E308DS. Your FireWire camera plugs right into the PC, plus you get inputs for all your other electronic goodies. Sony even sweetens the deal with video editing software that makes you look like a pro.

Workstation

Hewlett-Packard Kayak XU PC Workstation Amazing graphics--most people won't believe you created them on a desktop PC. The Kayak XU PC Workstation's dual 450MHz Xeon processors give you all the muscle you need, and the system's pair of SCSI hard drives make sure your creations keep pace.

Small-business Server

Cobalt Qube 2700WG Microserver You don't need to wait for Windows 2000 to get an easy-to-manage server. With the Qube Microserver 2700WG, administering your network or intranet is as easy as surfing the Web. Handle all your network chores from your browser, and let the Linux-based Qube take care of the rest.

Workgroup Server

Compaq ProLiant 1600 Your workgroup's small now, but it won't be for long if you have your way. That's why you need the ProLiant 1600. As a file, app, or Web server, it does the job, thanks to its dual 400MHz Pentium II CPUs, 512MB of RAM, and six 4.3GB hard drives. Another bonus: The more you throw at the ProLiant 1600, the better it performs.

Departmental Server

Compaq ProLiant 6000 Xeon Buy now, no worries later. Compaq knows your server will be with you longer than the new marketing guy. That means a system that easily grows with you: Start with a pair of 400MHz Xeon processors, then scale up to four when you're ready.

— Christine Grech Wendin