Internet appliances offer an easy way to get online without the technical hurdles of setting up and configuring a PC. We have reviewed several Internet appliances over the last few months, including the iOpener and Virgin Webplayer. Now Compaq has stepped into the ring with its iPAQ Home Internet Appliance IA-1. Compaq has been a reputable PC manufacturer for many years, and we were curious to see how its new Net appliance compares to the competition.

The $399 iPAQ IA-1 has a spec sheet similar to a low-end PC: 266MHz AMD K6 CPU, 32MB SDRam, 16MB Flash RAM, integrated LCD display, four USB ports, 56K modem, built-in microphone and speaker. The 16MB of Flash RAM acts as the permanent storage for the iPAQ, allowing users to store bookmarks, cookies, and other Web-related information. The IA-1 uses MSN Companion 2.0 as both an OS and as the interface through which you log on to MSN, the exclusive Internet access provider.

When you purchase the iPAQ IA-1 and subscribe to MSN for three years (at $21.95 a month), you are eligible for a $400 rebate. Subscribing for one year earns you a $100 rebate; subscribe for two and your rebate is $200. This leads us to our biggest complaint about the IA-1 — its price. The appliance itself is $399 and three years of MSN (for the big rebate) will set you back $790 and some change. That works out to about $800 for three years of Web surfing with an appliance. A 600MHz eMachine will cost you about half that. Throw in a nice monitor and a free ISP and suddenly the iPAQ IA-1 looks a little less appealing.