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Why spend $500 when you can bring that virus and malware computer back from the dead (for Neighors #1 and #2) with something like ubuntu linux?
I know you have tried linux and found it wanting for the general user, but you tried Sun's offering which isn't a genuine try in my book. I like Sun well enough, but they are not a Linux, much less an end-user, focused company. Ubuntu fits the bill and Nieghbors #1 and #2 don't have too specialized needs. If it is just office work, email, chat, web, and even some sound, Ubuntu can fill the bill.
Sure, there is a trade off. I will be the first to admit it. You can't buy software at the store. You will have problems with some modems (though DSL and Cable Modems work like a charm). Any incompatiblity headaches would, in my opinion, be offset with the fact that the computer just works and Internet browsing isn't frought with inumerable landmines of malware and virus infections just waiting to get you on Windows...
Plus, it didn't cost $500 dollars for the Mac hardware. There is an argument that the money spent of PC software will need to be reinvested, but Open Source alternatives for some of those applications exist for the Mac as well. Still... $500 bucks is a lot in my world.
My brother was able to acquire an old PC for next to nothing that he and his wife were going to use, but couldn't afford the cost of setting it up with new software and the stuff already on the drive was hosed. I put SuSE 9.1 with Firefox, Shockwave, Realplayer, XMMS, GAIM, Open Office, and Thunderbird, on the system and they are using it to get real work done. Neither of them is a Linux person, but they had used Open Office on Windows before.
He went from a malware and virus destroyed PC that was useless to a functioning workstation for $0 effectively. Your neighbors could do they same thing.
The funny thing is that they could "try before they decide." Just burn them a Knoppix Bootable Linux disc or an Ubuntu Live disc and let them use it for a while. If they need to save any work, they could just save it to a jump drive (if they have one) or floppies. If they decide that they can live with the system, it is a simple matter to install the OS.
Bootable Linux CDs would have helped you as well. Don't want the neighborhood kids destroying your Windows setup. Boot up Knoppix and let them browse the web with that. Reboot and you are back to your pristine windows.
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Showed them my Laptop with Ubuntu. Easy sale. Free software for life.
I also set up gnomemeeting and skype so they could talk to freinds in the Phillipines.
I set the computer up. Showed them how to run apt-get update and apt-get upgrade. And chkrootkit and rkhunter once a week.
Strangely enough I never have calls from them about viruses or malware. Unlike my Windows using freinds.
They didn't care what system was on the computer as long as it worked.