Macs are hard to push when the low-budget thing comes up. The best bang for the buck right now is the eMac, but that comes in at $999 new (entry level). Apple's refurbs are excellent, but it's not like they're cutting the price in half - you can get a refurb eMac for... er, $699. I stand the fuck corrected. But it doesn't have a CD-RW drive. If you wanted to upgrade to the DVD/CD-RW combo drive, it would add another $150 to the price. I wouldn't bother for them, I think. You can go to crucial.com and order some RAM for it (part CT260484, an extra 512 megs for about $95 with the coupon, which I'm eligible for even if you're not). So they'd have a 640 meg machine with a 700MHz G4 (decently fast) and GF2MX graphics for about $800. Not too bad. Add a decent inkjet printer and you're looking at $900. Apple's refurbs are basically good as new and carry the standard warranty and all that, so you don't have to worry about the used bit. (I'm told, by friends at Apple, the refurbs are usually just open box items.)
The lack of software can be an issue if they're the type to buy whatever's at Wal*Mart. You can find most anything you need, either online at apple.com or at CompUSA (or various other resellers). So it's maybe not as convenient as Wal*Mart, but it shouldn't be a *huge* issue either. And I'm definitely willing to help out if they can't find a program and need a replacement - I know all the places to look, so all you'd have to do is ask.
As for PC's, I'd go name-brand with support, just because it means you don't have to support it for them. Lots of people ask me to build them computers now, and I tell them to go buy a Dell. It's not worth my time to support a PC, usually because there are so many little problems you get called with ("How do I check my email?" etc).
Now, if it were my relatives... I would say "these are really the two choices. I personally would stick you with the Mac, because it's easier to use, but Windows XP isn't too bad either. So you pick." They'll probably pick PC, and that's okay too.
Relevant link -
http://www.apple.com/emac and you're looking at the entry-level model with just a CD-ROM.