My brother got the base MacBook model for his birthday. We purchased an upgraded 120GB drive from OWC.com ($150) and 2 1GB sticks from Ramjet.com ($259). Installation was amazingly simple!
I had some trouble with the install of the OS, disc 2 kept returning an error that the installation failed. The 3rd attempt was successful. The machine is noticeably faster.
We attempted to transfer his files from his old snow white iMac using the new file transfer utility that appears in the initial setup screens. It failed to transfer any files from his 'Home' Folder. However it did successfully transfer his user name, login information, and network settings. I had to transfer over the Library, Documents, Movies, Music, Pictures Folders manually.
What a wonderful little machine.