Don't know enough about the chipset, but 256M Ram is weak, IMO. Linux, yep, but even XP likes 512 or more in order to run acceptably. THAT said, $285 for something that will run touchscreens, has comms (Ethernet) and serial, and is easily tucked into small, unobtrusive places certainly has a niche.
if you like small, but more more horsepower, check out the mini-itx and even nano-itx stuff. Just google and you'll get a ton of hits. Lots of good tricks there too--Solidstate HD for fast boots, etc.