I'll keep my feet on the ground, somewhat. It's pretty much an iMac3 with +1 HD slot, +1 PCI-E slot, +DVI, +video in, +passive cooling, +Bluetooth as standard, -modem, -screen.
Single 2GHz G5. Room for two sticks of memory, two hard drives, an optical drive, CoreGraphics capable chip integrated on motherboard with DVI out, TV out and video in, empty PCI Express slot, passive cooling all around (processor, graphics, hard drives), airtight enclosure that keeps noise inside and dust out (possible to open ventilation slots if an expansion graphics or other card needs airflow). USB2, Gigabit Ethernet, Firewire 400, Firewire 800 and Bluetooth connectivity. Slot for an Airport Extreme card. Cube or other nice design.
The expensive parts are the chassis (because of the thermal design) and mobo (because of the VIVO graphics chip). The connectivity and expansion parts cost pretty much nothing when they are integrated on the mobo. The iMac3's chassis and mobo are also expensive., therefore I think this could easily be built to sell for sub $1200 at the time of the next Powermac revision, and it would still fetch the normal Apple profit margin.