Usually benefit places with very little space such as dorms, classrooms, offices and for television media centers. The VIA PC is designed for people on a tight budget, where as the Intel version is designed for people with a more of a relaxed budget for a TV PC.
The processor can be upgraded on the Intel System, up to a 2.33GHz Core 2 Duo I believe.
There is really no sacrifices in the computer, providing your not planning on gaming on the system, it has the hard disk capacity of a standard computer (320GB SATAII), 2GB of DDR2 RAM, TV Tuner, HDMI, VGA and DVI, 6 USB ports and more.
The price, I agree is higher than standard desktop computers, but the demand for small form factor computers are becoming more popular for places mentioned above.
It also is faster and has more hard disk space than most laptops offered at that price.