Wow! What a bargain! Why is it so cheap?!
Well, because it's a scam of course. It comes with a two-year subscription to Sprint at $60 a month. So you're on the hook for $1440 over the life of the contract.
But what's interesting here is that the device is now being seen as merely the prop to deliver the actual product, which is the subscription to the service. There has been speculation going around for a while that the iPhone will eventually be given away for free when you get on the hook for two years with American Telephone & Telegraph. This netbook roll out is not indicative of netbook pricing (they're cheap, ain't THAT cheap) but it could be an indicator of the future of how devices and subscriptions are marketed.
Meanwhile, Moby released his single free online a while ago. IT'S THE SAME THING except you don't need to subscribe to Moby for two years.