If you break it to parts, it's not a good deal. It's not a bad deal either as it comes ready in a box with a warranty.
Similar or better system self-made would be around...
$108 for AMD XP2400+ with motherboard (integrated video)
$033 for 256MB memory
$063 for 80GB HD
$029 for case + power
Add a few things like keyboard and mouse, speakers, those things don't cost much and you get to pick the ones you like. If you want to spend that $500 then you could get a pretty good computer with faster processor, add-on videocard, more memory and more HD.
Or you could get an assembled computer for less.