Dell can underprice everyone else because they:
1) Have massive economies of scale.
2) Only prebuild common configs and hold minimal stock - everything else is built to order.
3) Have a very close relationship with Intel so they get good prices - they only use Intel processors and certainly the last time I studied them their mainboards are all Intel OEM too, which although not the fastest are _very_ stable.
4) Don't support an extra tier of dealers that HP/Compaq and IBM do.
We've installed around 100 Dell PCs and 15 servers over the last year and I think we've had one hardware fault in all that time, which was a HDD failure.
I'm not saying that Dell are the fastest or best quality, but most of their stuff is well designed and reliable and they can't be beaten on price.
My feelings exactly...