(FORTUNE Magazine) – The PC industry may be slumping, but PCs themselves are faster and more functional than ever. Both Intel and AMD offer processors that run at 1GHz and faster--offering more than enough juice for business applications. The trick is finding the right combination of drives, extras, and options that's perfect for the job.

If power is your top priority, Dell's Dimension 8100 boasts an Intel Pentium 4 processor running at 1.5GHz and delivers multimedia muscle. Better still, the Xi DDR MTower SP system has similar benchmarks for less money.

If simplicity and affordability are more important to you than performance, you have a host of simple systems to choose from. The HP Pavilion 2755C, for example, features a well-designed system with a built-in CD-RW drive for less than $1,500.

For the home or the office, the classic Acer Veriton FP2 is a first-rate personal computer, with a design that could make an iMac green with envy. Compaq offers the Compaq iPaq Home Internet Appliance A-1, an easy-to-use, inexpensive system that can get even the most technically deficient on the Net in minutes.

And if these choices aren't enough, check out the Sony VAIO Slimtop PCV-LX900. The performance isn't top-notch, but its touch-sensitive display makes it a truly innovative offering in the sometimes-staid world of desktop computing.

Sony VAIO Slimtop PCV-LX900 Tablet Computer By Dan Littman

If you use a mouse instead of a digital pen and tablet, you're missing out on the most tactile and enjoyable way to interact with your computer. Still, a tablet shares one drawback with the mouse: Your hand is separated from the onscreen image. Sony's VAIO Slimtop PCV-LX900 pen tablet computer bridges that gap.

This desktop's special 15-inch 1,024-by-768-pixel LCD doubles as a pen tablet, making it perfect for sketching in Adobe Illustrator or editing pixels in Adobe Photoshop. Drawing on the screen might seem inconvenient, but the Slimtop PCV-LX900's articulated display stand lets you position the LCD as you would a pen tablet, at a comfortable writing angle. We wanted to hold the screen like a lap desk, but unfortunately, the stand doesn't detach. Another oversight is the lack of a simple handwriting-recognition program. For occasions when you must enter text, such as naming a file, you'll have to move the display out of the way to access the system's keyboard. The touch screen offers pressure sensitivity, for drawing a wider line when you press harder, and is the most colorful touch screen we've seen.

A TOY BOX FULL OF SOFTWARE

Sony bundles several gigabytes' worth of creativity software, including Adobe's Photoshop 5.0 LE and Premier 5.1 (a video-editing tool), plus GoLive 5.0, for producing Websites; LiveMotion 1.0, for creating graphics and animation; Sonic Foundry SoundForge XP 4.5, for audio editing; ArcSoft PhotoPrinter 2000 Pro, for arranging photos on a page or template; and Microsoft Word 2000.

Graphics users who want to run 3D applications will find the PCV-LX900 unequal to demanding 3D tasks. Despite its fast 1GHz Pentium III with 128MB of memory, two components compromise its speed: The slow, integrated video controller taxes main memory instead of providing its own; and the system's hard drive spins at only 5,400rpm, compared to the more common 7,200rpm.

If you can forgive the Slimtop PCV-LX900 for its sluggishness, you'll find it well designed and easy to use. Its expandability, though, is limited. The slender purple chassis includes plenty of ports for attaching peripherals, but no open bays for hard drives. One PCI slot and one memory slot are free; the system supports up to 512MB of total memory.

The back panel offers an Ethernet interface, a V.90 56Kbps modem, a regular monitor port, two USB ports (the monitor has a third), and a six-pin IEEE 1394 interface (which most vendors call FireWire, but Sony calls iLink). On the computer's front, the small trap door slides away to reveal a fourth USB port; a slot for a Memory Stick (Sony's format for the Flash-memory cards for digital cameras); a PC Card slot; and a four-pin FireWire port, which supports devices that have their own power, such as video cameras. The PCV-LX900 includes an 8X/4X/32X CD-RW drive, but a USB-connected floppy drive is an $80 option. A mouse can be used instead of the pen.

The Sony VAIO Slimtop PCV-LX900 should perform adequately for graphics professionals and artistic hobbyists who want a digital sketch pad. But its plodding 3D performance neglects what should be a natural market for the PCV-LX900: solid modeling, 3D animation, and design work that merge tactile and visual skills.

Sony Electronics Inc.; San Jose, Calif.; 408-432-1600; www.ita.sel.sony.com

CNET REVIEW RATING OUT OF 10 8

THE GOOD: Stylus and touch-sensitive display/tablet are comfortable and easy to use; extensive graphics software bundle. THE BAD: Subpar performance. THE BOTTOM LINE: The Sony VAIO Slimtop PCV-LX900's stylus and touch-sensitive display offer an innovative user interface for graphics applications and everyday computing. PRICE RANGE: $2,825 to $2,999

Dell Dimension 8100 By Jon L. Jacobi

Dell's new Dimension 8100 desktop offers Intel's Pentium 4 and a sleek silver-and-black shell that's a far cry from your basic beige box. This system's outstanding 3D performance makes it a possible choice for multimedia mavens as well as gamers. On the other hand, its disappointing pace when running mainstream applications means that most desktop users would be better off with a Pentium III- or Athlon-based system.

The brand-new Pentium 4, running at 1.5GHz, is currently the fastest available. Built around Intel's new 850 chipset, the Pentium 4 offers state-of-the-art technologies, including 4X AGP, a 400MHz front-side bus (FSB), and dual-channel RDRAM support. Considering the Dimension 8100's 128MB of PC800 RDRAM and 40GB Western Digital Caviar hard drive, you'd think this system would blow everything else out of the water--and for $2,626 as configured, it should. Where 3D is concerned, it did: In CNET Labs' Quake III benchmarks tests, the Dimension 8100 processed an incredible 164.4 frames per second (fps), nearly 40% faster than any other system we've tested--and more than the 60fps a gamer needs to be happy these days.

However, the Dimension 8100 performed disappointingly in CNET Labs' application-based benchmark. Running Windows Me, the Dimension 8100 scored a yawn-worthy 145 points--far behind the similarly configured 1.1GHz Athlon and 1GHz PIII systems, both of which were running the faster Windows 98 SE. It's also worth noting that a similarly configured, Windows 2000-based Pentium 4 system tested by CNET Labs earned a score of 173--19% faster than the Dimension 8100 and the fastest application score CNET Labs has seen.

HIGH FIDELITY

The Dimension 8100 comes packed with top-shelf components, including a fast 12X/10X/32X CD-RW drive, a 12X DVD-ROM drive, and a lush 19-inch Dell P991 Trinitron monitor. This system can double as a home-entertainment station, since the Dimension 8100 is THX certified. New to PCs, this sound standard promises a near-theater-quality experience from THX-enhanced media such as DVD movies. We pumped up the volume on the Dimension 8100's Turtle Beach Santa Cruz sound card and Advent 5.1 speakers (five satellite speakers and a subwoofer), to excellent effect.

The power supply swings out to provide easy access to the system's four RIMM memory slots and the motherboard power connectors. Four handy diagnostic lights adorn the back panel, next to the serial, parallel, USB, and integrated 10/100 Ethernet ports. If a hardware fault prevents booting, the pattern of these lights will give you an indication of the problem. The interior is neatly organized--a Dell trademark. It's easy to access the system's slots and bays for upgrading, and all wiring is neatly tied down.

The system also offers signal stability on the motherboard, an increasingly important concern as CPU and bus speeds increase.

The 8100 has two free 5.25-inch externally accessible drive bays, but its single external 3.5-inch bay is occupied by the floppy drive. If you want to add an internal Zip or other 3.5-inch drive, you'll have to use mounting brackets in one of the larger bays. Three of the system's five PCI slots were available for expansion, with the remaining two occupied by a Conexant V.90 56Kbps modem and a sound card.

SOLID SUPPORT

Dell's service and support for the Dimension 8100 is generous. The company provides a three-year limited warranty, one year of on-site service, and lifetime toll-free telephone support. The system documentation is well written and organized.

If you want top-notch 3D performance and are willing to pay for it, the Dimension 8100 may be the way to go. For users who want to stick mostly to mainstream applications, however, a Pentium III- or Athlon-based system still provides more bang for the buck.

Dell Computer Corp.; Round Rock, Texas; 888-782-3355; www.dell.com

CNET REVIEW RATING OUT OF 10 7

THE GOOD: Superb multimedia features; stellar 3D and gaming performance. THE BAD: Expensive; slower than a 1GHz machine when running mainstream applications. THE BOTTOM LINE: Multimedia mavens and gamers could benefit from the system's sizzling 3D speed, but it's disappointingly slow. PRICE: $2,626

Xi DDR MTower SP By Jon L. Jacobi

The Xi MTower SP's performance soars with the help of a fast 1.2GHz processor; 256MB of DDR SDRAM; a 7,200rpm, 30GB IBM hard drive; and a 64MB Nvidia GeForce2 Ultra graphics card. Without the burden of the slower Windows Me operating system, the DDR MTower SP probably would've shattered our records.

In CNET Labs' tests, the MTower SP's 176 performance score on SysMark 2000 was excellent, as was the MTower's 9,032 3D score. Alas, when we knocked its memory down to a more commonplace 128MB, the MTower SP's business prowess returned to mere-mortal status. Its performance score dropped 7.3%, to 163; 3D performance was affected hardly at all, dropping less than 1%.

The MTower SP's appeal goes beyond performance. Its Creative Labs Sound Blaster Live sound card and Altec Lansing ACS45.2W speakers produce sharp highs, clear midrange, and plenty of bass. The system's 19-inch Optiquest (ViewSonic's budget line) monitor has a clear picture--up to the tested resolution of 1,024-by-768 pixels. A Pioneer DVD-115 DVD-ROM drive rounds out the home-theater package. Sadly, there's no CD-RW drive for creating audio CDs or for backing up data.

The sturdy blue-and-white midtower case looks vaguely like an Apple Power Mac. Inside, there's plenty of room for additional drives and PCI cards. Only one of the system's three 5.25-inch drive bays was filled, and two 3.5-inch bays were free. Three PCI slots and a single DIMM slot were also open. A nice touch was a mesh fabric sleeve around the normally loosely bound power-connector wires.

The MTower SP's documentation includes component manuals and a user guide. The latter was informative, but not extensively illustrated. The MTower SP carries a three- year parts-and-labor warranty with one year of on-site service. Telephone technical support is available toll-free 24/7.

CNET REVIEW RATING OUT OF 10 7

Xi Computer; San Clemente, Calif.; 800-432-0486; www.xicomputer.com; $2,999

ABS Athlon Special By Ken Feinstein

ABS's Athlon Special almost qualifies for too-good-to-be-true status. Crammed with components powerful enough to crunch your spreadsheets and your gaming enemies, this PC will satisfy home users and gamers alike. Unfortunately, its blurry monitor might prove annoying.

Priced at just $999, the 850MHz Athlon-based midtower is budget-sector magnificence. Equipped with 128MB of PC-133 SDRAM and a big 20GB, 7,200rpm hard drive, the Athlon Special powered through CNET Labs' tests, producing excellent scores across-the-board. Thanks to its 32MB GeForce2 MX graphics card, the system turned an astounding 90fps in our Quake III benchmark.

Music fans and gamers will love the Athlon Special's Altec Lansing ACS55 speakers with subwoofers. With the Sound Blaster PCI 128 sound card, these beauties produced a full, rich sound that didn't lack low-frequency rumble. The system comes with a 52X CD-ROM drive and a 56Kbps modem. If you're interested in watching DVDs on your PC, you can upgrade from the CD-ROM drive to a 12X DVD-ROM drive for $60. ABS includes a roomy 17-inch (16-inch viewable) ADI monitor, but the picture is fuzzy and dull.

The Athlon Special provides plenty of room for expansion, with two open 5.25-inch bays, two 3.5-inch bays (one internal), and three open PCI slots. Located on the back of the chassis are two USB ports, two serial ports, one parallel port, and one game port. The included keyboard has programmable buttons for CD playback, Internet browsing, and more.

ABS includes a large binder with a straightforward, illustrated user manual, plus all the system documentation and drivers. Word Perfect Office 2000 and Norton Anti-Virus SE also come with this package. The company offers a generous three-year parts warranty and a lifetime guarantee on labor. Customers must pay for shipping their systems to ABS for service, but can expect about a week's turnaround on repairs. Lifetime phone support is available, toll-free, weekdays.

ABS's Athlon Special is one of the fastest sub-$1,000 PCs we've seen, and it surely would have earned an Editors' Choice award were it not for its fuzzy display.

CNET REVIEW RATING OUT OF 10 8

ABS Computer Technologies Inc.; Whittier, Calif.; 562-695-8823; www.buyabs.com; $999

[Editor's Choice] Apple Power Mac G4 (Dual 500MHz) By John Rizzo

Apple's fastest Macs recently got faster, though not by bumping up the processor speed. Instead, the 450MHz and 500MHz Power Mac G4s now feature two processors.

Apple has also added an improved mouse and a bigger keyboard, and kept the machines at the same price as the single-CPU units they are replacing, starting at $2,390 for the 450MHz with 128MB RAM and $3,499 for the 500MHz model with 256MB RAM.

The dual-processor G4 500 is almost identical to its predecessor, with a hinged door that swings open for easy access to the drive bays and four expansion slots. There are three open PCI slots and an AGP 2x slot taken by the ATI Rage Pro 128 card with 16MB of SDRAM.

As before, the motherboard is loaded. There are two FireWire and USB ports; an AirPort wireless networking slot; and a new gigabit Ethernet port that can automatically switch between 10Mbps, 100Mbps, and 1,000Mbps (1Gbps) speeds.

A DVD-ROM drive is standard on the 450, and a DVD-RAM drive comes with the 500MHz version. Our 500MHz review unit also contained 256MB of SDRAM, expandable to a maximum of 1.5GB, and a 40GB Ultra-ATA/66 hard drive.

However, Apple did cut some costs: There's no internal FireWire connector as in earlier G4s. The Zip drive is now an $80 option, and the power button on the keyboard, a longtime Mac feature, has disappeared.

TWICE THE POWER?

CNET Labs tested a 500MHz dual-processor system and found that twice the processors doesn't equal twice the performance. But we did see 40% performance gains over a single 500MHz processor on some tasks.

When used with Mac OS X, which supports Symmetric Multi-Processing (SMP), all applications will be able to tap the dual processor without any special optimization.

If you use the system with Mac OS 9, only applications written specifically for dual processors will benefit from the setup. Non-optimized programs will run as they would on a single-processor Mac. Fortunately, we didn't encounter any compatibility problems running OS 9.

OF MICE AND MACS

The new optical Apple Pro Mouse is an improvement over the previous "hockey puck" model. It's comfortable in your hand, attractive, and more accurate.

It also has a nice click feel, but lacks features found on other optical mice, such as a scroll wheel or a second mouse button. The new Apple Pro Keyboard has more keys than before, including programmable function keys.

The new Power Macs have two video ports: a standard VGA connector and the new ADC connector used by Apple's current monitors. If you bought last year's $4,000 LCD Apple Cinema Display or $1,000 LCD Apple Studio Display, you're out of luck. There's no way to connect them to this Power Mac.

At this point, the dual-CPU Power Macs are the best choice for graphics and multimedia professionals who use processor-intensive applications. But if you're not in the multimedia field, the $1,599 400MHz single-processor model--which also has gigabit Ethernet, and the new keyboard and mouse--is a better value.

Apple Computer; Cupertino, Calif.; 800-692-7753; www.apple.com/store/

CNET REVIEW RATING OUT OF 10 9

THE GOOD: Faster, thanks to a second processor; same price as the single-processor machine; improved mouse; Gigabit Ethernet. THE BAD: No internal FireWire connection; limited monitor options. THE BOTTOM LINE: Makes the most sense for professional users PRICE RANGE: $2,390 to $2,878 (from seven merchants).

Gateway Performance 1500xl By Jon L. Jacobi

Featuring Intel's flagship 1.5GHz Pentium 4 processor, Gateway's Performance 1500xl delivers standout multimedia performance but fails to impress when running everyday business applications.

Armed with 128MB of RDRAM, a 60GB hard drive, and a 64MB Nvidia GeForce2 Ultra graphics card, this well-heeled system is clearly aimed at multimedia enthusiasts. The Performance 1500xl includes powerful multimedia components: a Hauppauge WinTV tuner card, a 16x DVD-ROM, a 12x/8x/32x CD-RW drive, and an IEEE 1394 adapter for attaching digital-video recorders. The system's Sound Blaster Live sound card with digital output drives a brilliant-sounding set of Boston Acoustics BA7500g 4.1 speakers (four satellites, one subwoofer). A 19-inch Mitsubishi Diamondtron flat-screen CRT rounds out the package, delivering remarkable clarity and color at 1,280-by-1,024-pixel resolution.

The sturdy, midsized tower (adorned with graphite-colored translucent panels) has three open 3.5-inch drive bays but no available 5.25-inch bays. Although four of its five PCI slots are filled, the 1500xl ships well equipped, so you'd have difficulty finding a use for an open slot anyway. There are two available RIMM slots for more memory, plus one IEEE 1394 and two USB ports.

The Performance 1500xl's flashy configuration is best suited for graphics and gaming. In CNET Labs' tests, its SysMark 2000 score of 136 seemed slothful compared to the Xi 1.1GHz Athlon-based MTower's score of 166. But the Gateway achieved high 3D and gaming marks.

The Gateway Performance 1500xl comes bundled with Microsoft Windows Me, Office Small Business Edition, MGI's VideoWave 3 video-editing software, Norton AntiVirus, and Quicken Basic 2000. Gateway also provides a three-year parts-and-labor warranty, one year of onsite service, and toll-free 24/7 telephone support for as long as you own the system.

If multimedia, video editing, or gaming is your thing, the versatile Gateway Performance 1500xl could be worth the cost. On the other hand, with an Athlon- or PIII-based system, you can reap the same business-application capabilities and roughly 80% of the P4's multimedia processing power for a lot less cash.

CNET REVIEW RATING OUT OF 10 7

Gateway Inc.; San Diego, Calif.; 800-846-2000; www.gateway.com; $3,299

Dell Dimension L800r By Dan Littman

If you need an inexpensive PC to tear through business applications, Dell's Dimension L800r fits the bill. With no extras, like a DVD-ROM drive or pleasing audio, this configuration seems best suited for small-office or home-office users.

Dell serves up a fast 800MHz Pentium III with 128MB of memory (expandable to 512MB) and a 10GB hard drive. Dimension L800r's chassis is well designed: Release the lever located on top of the case, and it splits in half for easy access to the two open PCI slots (four total). On the PC's back, you'll find a parallel port and two USB ports.

Dell includes a 56Kbps V.90 modem, its QuietKey keyboard, and a Logitech mouse. The Dimension comes with Microsoft Works Suite 2000 software, which contains Works, Word, Home Publisher, PictureIt Express, Money, and Encarta.

The Dimension L800r excels at business applications but underwhelms on the multimedia front: CNET Labs clocked it 15% ahead of two similarly configured 800MHz Athlon systems, but Dell cut costs by using Intel's 810e onboard video and a measly 4MB of VRAM. This spells disaster for 3D gaming, but that's not the L800r's target.

As configured, the L800r's small 15-inch Dell E550 monitor is adequate but unimpressive. The display looks fine at 800-by-600-pixel resolution, but flickers miserably at 1,024-by-768. The Sound Blaster 64V sound card provides a joystick port and speaker, microphone, and audio-in jacks. The system's 48x CD drive has a volume-control dial and a headphone jack placed conveniently on the face of the drive, but the no-name speakers distort, even at low volume. That said, Dell's computers are configurable, so you can upgrade to a roomy 17-inch monitor for an additional $80, or add support for digital sound and a set of booming Altec Lansing speakers with a subwoofer for $60.

The Dell Dimension L800r makes a fine small-office or home-office PC, but you should upgrade to a larger monitor.

CNET REVIEW RATING OUT OF 10 7

Dell Computer Corp.; Round Rock, Texas; 888-782-3355; www.dell.com; $999

Dell Dimension 4100 By Dan Littman

Dell's affordable Dimension 4100 is a striking example of well-tuned PC performance. It's hard to fault the powerful yet unassuming beige box--in fact, we had a hard time finding anything to gripe about. The Dimension is, like all Dell systems, custom configurable, but its base specs provide almost everything a user could need.

Despite its low price tag, our review unit was teeming with high-end components: an 800MHz Pentium III processor, 128MB of memory, a 20GB hard drive, a 12x DVD drive, and Nvidia's new GeForce2 GTS 4X AGP video card with 32MB of DDR memory.

The Dell outperformed several more expensive PCs in CNET Labs' SysMark, application, 3D, and gaming tests. The Dimension's chassis is designed for easy access, from both the front and the side. Inside, you'll find two empty drive bays, along with the hard drive, the DVD drive, and all the rest. Also inside are five PCI slots, three of which are open, and two memory slots that can accommodate up to 512MB of RAM.

The unit tested included a 3Com 56Kbps PCI modem, but DSL users and networked office workers can add an Ethernet card for $40. The review unit included a Sound Blaster Live sound card and a booming set of Altec Lansing ACS-340 speakers with subwoofer.

Other highlights: Dell's M780 17-inch monitor is easy on the eyes and features a simple-to-use onscreen menu for making adjustments. The Dimension 4100's software bundle includes Microsoft Works Suite 2000 and Norton AntiVirus 2000, and Dell tosses a one-year Internet service plan, Dell.net, into the package as well. The 4100's solid warranty provides one year of on-site parts and labor, followed by two additional years of parts coverage. Dell's free telephone support for diagnosing hardware problems is available 24/7 for the life of the computer.

Dell has assembled an outstanding system for small-business users and home enthusiasts alike. The Dimension 4100 is fast, allows room for expansion, and has a great warranty.

CNET REVIEW RATING OUT OF 10 9

Dell Computer Corp.; Round Rock, Texas; 888-782-3355; www.dell.com; $1,588

Acer Veriton FP2 By Dan Littman

The Veriton FP2 doesn't look anything like an ordinary PC. Its 15-inch digital LCD monitor is fixed to a base that has drive bays, I/O ports, and a 4X AGP slot. This unique look is attractive and functional.

The FP2's $1,999 price tag includes an 800MHz Pentium III with 128MB of memory, a 20GB hard drive running Windows Me, and a 15-inch digital LCD. The entire computer is contained within the tapered blue base. On the left side of the unit, you'll see a parallel, port, a serial port, and two USB ports, plus a digital video-out that feeds the LCD and the analog video port. Sound ports, an Ethernet port, and a 56Kbps modem round out the array. The front of the post contains two hot-swappable drive bays and two more USB ports. CNET's test unit included a floppy drive and a 24x CD-ROM drive.

The Veriton FP2's innovative design forgoes standard internal expansion options, but devices such as CD-RW or DVD drives are supported by the two hot-swappable drive bays inside the Veriton's base. You can buy a swappable 18GB hard drive for $245, an 8X DVD player for $179, and a 4X/4X/20X CD-RW drive for $249.

The digital flat-panel display stands several inches above your desk, for comfortable viewing, and tilts a few degrees to accommodate shorter and taller users. Its eye-pleasing picture is crisp at its native 1,024-by-768 resolution, and colors are beautifully saturated. The LCD's built-in stereo speakers, unfortunately, sound weak and thin.

For all its stylish looks, the Veriton FP2 is no hot rod. As configured, our test unit turned in dismal 3D and gaming scores in CNET Labs' tests. But the Veriton has potential: Its 4X AGP slot can hold the newest, hottest video cards for superfast 3D rendering and game playing. Besides the tinny speakers, our main quibble is that the Veriton lacks bundled software.

Acer supports the Veriton FP2 with a generous three-year warranty that includes toll-free, 24/7 tech calls answered by a person, plus a year of on-site service. What this system lacks in performance it gives back in style, convenience, and ease of use. Additionally, it provides a stunning digital LCD at a reasonable price.

CNET REVIEW RATING OUT OF 10 8

Acer Communications and Multimedia America Inc.; San Jose, Calif; 800-733-2237; www.acercm.com; $1,495-$1,899

Compaq iPaq Home Internet Appliance A-1 By David English

More than half the homes in the United States have a computer, but there are a lot of folks who want to go online without the cost or complexity of a PC. With Compaq's iPaq Home Internet Appliance, they can. Although it's certainly not for the power-hungry, this device is well worth a look if all you want to do is grab E-mail and visit the occasional Website.

Compaq's stylish Home Internet Appliance comes pretty close to being as easy to use as a telephone. PC makers realize that the group of people who haven't yet gone online are different from those already there. The iPaq Home Internet Appliance is one-size-fits-all. It's completely sealed, with no way to upgrade the hardware, other than through four USB ports.

The product consists of a separate wireless infrared keyboard and a tilting LCD screen; the monitor and its base form an L. The machine comes with built-in speakers, a 56Kbps modem, and a slightly smaller keyboard than a typical PC. It has a pivoting navigation button for moving the onscreen cursor. A set of activity keys aid visiting special Web pages (home page, help, search, instant messaging, E-mail, news, financial information, city guides, shopping, and favorite Websites).

The 10.1-inch passive-matrix LCD has a resolution of 800-by-600, good color, and a crisp image, though there's some ghosting when you scroll. Drivers for Epson's USB-compatible Stylus Color 740 and an optional Compaq USB mouse are already included.

The iPaq Home Internet Appliance was co-developed with Microsoft. As a result, you can use it only with the MSN Internet service ($21.95 per month). IPaq's price improves with the length of the MSN contract. The usual $599 price is reduced to $499 for a one-year commitment, $399 for two years, and $199 for three years.

The software was well implemented in our review unit. After plugging a phone line into the iPaq and pressing the on button, we immediately got online, to an MSN home page. A red light beneath the iPaq's screen indicates you have unread E-mail. To log off MSN, simply turn off the machine. Compaq recommends that you keep the unit plugged into a phone line, so it can automatically update software during nonpeak hours.

There's no hard drive; system updates are stored in 16MB of Flash memory. MP3 files and native Windows Media files are currently supported, but not RealMedia. The unit ships with a stripped-down version of Windows Media Player that supports all of the features of Windows Media Player 6.x. Java and Flash are supported, but not Shockwave.

When you buy the device, the vendor is supposed to insert your E-mail address and local phone number. Our unit came preprogrammed with an E-mail address and a Bay Area phone number. It was fairly easy to change the phone number, except that the system kept substituting the wrong area code.

KEEP IT SIMPLE

We encountered several thoughtful features, as well as a few quirks. For starters, the unit stays on all the time; that is, the on/off button logs you on to and off of MSN, but doesn't turn off the machine. You have to pull out the power cord to actually shut it down.

You can choose a built-in background picture for the inactive mode, or turn off the screen entirely. The default typefaces make it easy to read text on the small screen. And the device makes little noise when running.

Experienced PC users may be put off by the iPaq's limitations, but the Compaq iPaq Home Internet Appliance is remarkably easy to use and well suited for those new to the Internet.

Compaq Computer Corp.; Houston, Texas; 800-345-1518; www.compaq.com

CNET REVIEW RATING OUT OF 10 7

THE GOOD: Small; unobtrusive; quiet; easy to use; inexpensive. THE BAD: Navigation button is sometimes hard to control; occasional problems during weekend and evening hours. THE BOTTOM LINE: The best device so far for getting computer-phobes on the Internet. PRICE: $199 to $599 (based on MSN Internet contract)