I bought a G3 iMac (333MHz, the last of the tray loaders) for my parents. It cost me about $160 Canadian after shipping, and I sunk an extra $60 to bump the ram up to 160MB. I tossed Panther on it, and my parents absolutely love it. My mother is the only one that really uses it, and she only required that she be able to send email with it. However, since getting it for her, I've turned her on to iPhoto and digital photography, and the machine still chugs along just fine. Expose is a bit choppy at times, but considering that they never have enough windows open to notice it, it's only an issue when I need to use the machine.
The point is, a G3 iMac is still a fairly nice little machine, and it's a good one to "get your feet wet" with the Mac platform. And, as someone said before, for $45, you can't go wrong. Hell, I just bought a Beige G3 for $20 because it was a good deal. I don't need it, as I've got a bajillion machines running in my apartment, but I couldn't turn it down. While I would certainly suggest spending as much as you can afford for a much better Mac, there's nothing wrong with the G3 iMac, especially for that price. And who knows, when you upgrade eventually, that G3 iMac could go to a younger sibling, or a neighbour, and it would start them down the Mac path.
eMacs are good, as are G4/G5 iMacs, and Mac minis, but they can't be had at anywhere near the price range that you could get a G3 iMac for. If you're poor, and don't need a powerful Mac (ie. You're not a graphic design student, or anything like that) what does it hurt to spend $45 on it? Forego the pub crawl for one night, and you've made the money back. Hell, you could spend that night playing with the iMac, installing OS X, and downloading apps that you like. In general, it's not the greatest Mac, but it's one hell of a good deal. You may not be satisfied with it as a primary machine forever, but by then, the prices on everything else will have come down as well. It doesn't hurt to have more than one Mac or PC. My apartment is a testament to that. As such, why turn down a good deal just because you could get more by spending more?