> I am planning to buy 10 numbers of system for FOSS related free
> education + lab setup.
> Main purpose for buying these to enable students to work on FOSS (
> mainly Linux Admin and programming )  topics.
>

Raspberry Pi is the ideal choice here. Although, I am not sure whether 
it will be available in India.

http://www.raspberrypi.org/faqs

> Budget is really tight as all the money coming from my pocket. I was
> thinking about below configuration.
>
> 1. AMD Athlon II X2 260 + Gigabyte GA-78LMT-S2P + HDD + 4 GB Ram
>
> or
>
> 2. Intel Atom D525 based system.
>

For your purpose, a 4GB/8GB flash drive would suffice, you don't need a 
HDD. Once the kernel is in memory and your programs are in the cache you 
won't see any difference in performance.

Also, 2GB DDR3 should suffice for your purpose.

Regarding CPU/MB, I haven't come across a package less than Rs. 6000 
unless you get Atom. Atom D525 seems to be a reasonable processor. It is 
better than couple of my machines with Pentium 4 1.6Ghz and Pentium M 
1.73 Ghz which run Fedora 15 and Fedora 12 respectively. Also, read 
reviews on whether Atom works on Linux without any issues.

IMHO, you should setup one machine first. So that, you can make sure 
there are no driver issues and you are satisfied with the purchase.

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