(FORTUNE Magazine) – LIKE, DUH: IF AN OLD person, say, someone over 25, has to explain to a teenager why something is cool, it almost certainly isn't. So when a company called Digital Lifestyles decided to invent what it called "the first teen-lifestyle computer and entertainment system," named it the hip-e node (capital letters apparently are uncool), and explained that "this is not your parents' computer," you just knew it was gonna bite. Like, totally wack.

Of course, my own teenage years occurred when real hippies roamed the earth, so I can't review the hip-e node from the perspective of its 13- to 19-year-old target audience. But as a parent, let me just say I'm grateful that this is not my computer.

The hip-e node sounded very cool when I first heard about it last year. Like the Apple iMac G5, it's a computer integrated into a 17-inch widescreen, flat-panel display that can be mounted on a wall. It also has a built-in TV tuner, a remote control, and software for recording TV shows to the hard disk. Hooked up to a broadband Internet connection, the hip-e node can download music, music videos, and movies via Ethernet or its built-in Wi-Fi card. The optical combo drive plays audio CDs and DVD movies, and when it's party time, the speaker system detaches to serve as a portable boombox stereo. The wireless keyboard has dedicated buttons that create instant links to an online shopping mall where teens can order a pizza, browse for clothes, or buy music. And because this is a teen-lifestyle computer, it comes with a selection of videogames. Oh, just in case you were wondering, the hip-e node is also a real working Windows XP-based PC. What more could a teen want? How about a mobile phone and a portable MP3 music player? How about some wild and colorful skins (faceplates) to customize the computer and keyboard with zebra stripes or pink faux fur?

The hip-e node offers those too. In fact, with the possible exception of a refrigerator and an invisibility button for sneaking out of the house undetected, the top-of-the-line hip-e node system includes just about everything a typical teen might want in his or her room. And all this for prices starting at $1,699, the equivalent of a summer's wages from flipping burgers at McDonald's.

Digital Lifestyles, a company that in a previous incarnation dreamed up the iOpener Internet appliance for senior citizens and computerphobes--it flopped--said that this time around it enlisted scores of real teenagers to help design the hip-e node system and give feedback on its functions. The company is also training hundreds of teens to form "elite hip-e squads" to sell nodes and accessories to other teens in the prime teen habitat, shopping malls. (For now, the hip-e node is available only online at hip-e.com or by phone.) Once online, in the "hip-e hangout" virtual clubhouse on the web, squad leaders and squad members can earn money by persuading others of their species to buy hip-e nodes and accessories. Digital Lifestyles deposits the money directly into the teen's very own hip-e Visa or MasterCard debit card account, which can be used to buy things online or off. Squad leaders get commissions when their squad members sign up new sales recruits.

I can see the movie now: I Was a Teen-age Hip-e Multilevel Marketer. What I can't see, however, is why anybody would be willing to pay $1,699 to $1,899 and more--potentially a lot more--for what is essentially an underpowered, overpriced, and flimsily built multimedia computer with the technical equivalent of zits.

Several times, without warning, the hip-e node I tested would blast 50 or more separate Papa John's pizza pop-up windows on top of whatever else was onscreen. The "n" key on the keyboard decided periodically to become the "66666" key. From time to time the wireless keyboard link didn't work at all, even at point-blank range with fresh batteries. And so on.

Digital Lifestyles contends that the hip-e node system is cheaper than the aggregate cost of buying your teen a comparably equipped PC, a TV, a stereo, an MP3 player, a cellphone, a boombox, etc. That's probably true. But there's a reason it's cheaper. The system felt as if it was made in shop class. The node is based on a 1.6-gigahertz Intel Pentium Mobile processor, adequate for mundane homework tasks and simply not up for desktop multimedia applications or the advanced videogames a teenager wants to play. It's not upgradable. The hard drive, at 111 gigabytes, will quickly run out of storage space if the teen uses the TV recorder or music library to full advantage. It's not upgradable either, although the node does have a FireWire port for adding an external hard drive when needed. The standard 512 megabytes of RAM can be upgraded to 1GB for $199 extra, or to 2GB for $379. That's steep.

The basic version of the hip-e node costs $1,699 and includes the node (computer and display), the wireless keyboard and mouse combo, the detachable speakers (called the beatbox), and a dongle called the nodedock, which provides USB and FireWire ports and a seven-in-one media-card reader for adding digital photos.

The optional 512MB flash music player ($100 in a bundle or $149 bought separately) has enough memory to hold a few hours' worth of tunes and includes an FM radio and a voice recorder. It plugs into a USB port, and it also fits into a slot in the beatbox speakers, transforming the hip-e node into a portable boombox. But the beatbox speakers generate a measly 2.5 watts of power and require a separate power brick, which makes portability an improbability.

The optional cellphone, which someone decided to call the reachme, operates on the Sprint PCS network using prepaid calling plans. I didn't test the phone, which costs $100 extra when bought in a bundle with the hip-e node or $139 separately.

Whether it's the basic $1,699 system, the $1,799 playme or reachme bundle, or the $1,899 playme and reachme package, this is an expensive computer system. Unless the hourly wage for babysitting and mowing lawns rises dramatically, most teens are going to have to ask their parental units for financial help. And it doesn't stop there. After a 60-day trial period, Microsoft Office costs $149, and if you don't pay, the software reverts to Microsoft Works. The MusicMatch software for ripping and burning CDs is painfully slow, and getting a faster version costs $20. The TV Guide software is free for 90 days but costs $7 a month from then on or a $60 one-time fee. Downloading movies from the CinemaNow online service costs $5 a month plus movie fees. The games are not only lame but also crippled, and it costs $20 to unlock all the levels. The basic reachme phone service is $10 a month and includes just 40 minutes, which a teen will probably exhaust within the first hour of the month. Teen-friendly plans cost $40 to $80 a month.

Get an iMac G5, add a video tuner and an iPod shuffle, and both you and your teen will be a lot hippier. Er, happier.

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