Sounds good to me.
New 20gig Toshiba - $71 + shipping
M10000 EPIA MoBo - $175 + shipping
Power Supply - $30 to $50 + shipping
256mb Ram - $40 to $60 (crucial is free shipping)
So just at that you're already saving some bucks.
I think it would be powerful enough too. I have an EPIA 800 and it does everything I want it to do. And big differences between my board and yours? Processor and video. That one would be a 1ghz Nehamiah (spelling?) mine is just a plain 800mhz C3. Your video I believe does hardware mpeg decoding, which mine does not. Should be loads better.