My problem is as follows:

My current computer has an i7 processor, SSD, SLI'd graphics cards, a ton of RAM and it can quite easily run anything I throw at it without breaking a sweat.

Unfortunately I have the nagging suspicion that not everyone breaks out their life savings to purchase the latest and greatest hardware every year and I'm worried I might be writing code which runs fine on my computer but is unplayable on lesser computers.

So I figured I'd hook up my old computer and use that to test my code and make sure I wasn't going too crazy... Tragically it is also too overpowered to break a sweat from any code I can throw at it, and it turns out my laptop is about the same.

Having no other computers laying around at home - I've decided I'll try to assemble a really cheap basic computer that I feel would be a fair minimum spec for any work I do.

My first question is what generation of processor should I target? Would an Intel Core 2 Duo processor be a fair baseline? Should I go lower?

Second question is what generation of graphics card? I've heard all sorts of bad things about Intel Integrated graphics and they're generally what powers any computers without a discrete card. I think that would be a good level of performance to target but none of them support DX11 from what I can tell which is a little disappointing (I'm not really using DX11 features but they'd be nice to have if I want to experiment in the future).

For the RAM, I'll probably scrounge up a gig or two, and whatever will do for the HDD.

I was considering just picking up a netbook as they're pretty lousy in all respects but they kind of seem a little -too- lousy...

Suggestions? Advice? I'm quite out of touch with what "normal" users would have for hardware. I've looked at what stores are selling for their basic computers but I should probably be looking at what they were selling as basic computers 3 years ago but of course their websites don't show that.

Having no other computers laying around at home - I've decided I'll try to assemble a really cheap basic computer that I feel would be a fair minimum spec for any work I do.

My first question is what generation of processor should I target? Would an Intel Core 2 Duo processor be a fair baseline? Should I go lower?
...
Suggestions? Advice? I'm quite out of touch with what "normal" users would have for hardware. I've looked at what stores are selling for their basic computers but I should probably be looking at what they were selling as basic computers 3 years ago but of course their websites don't show that.

You make me smile.
"normal" non-IT savy users might be still running monocore. Some friends of mine have Athlon XPs and they don't plan to upgrade... your best bet is
Steam hardware survey - mostly gamers
Unity web player statistics - more casual

Want full accessibility? Shader Model 2. Yes, this sucks. Ah, of course no D3D10 for you as XP still roams the casual lands freely...

As a side note: consider getting your share of solar power.

Gamers are probably not a concern much, most carry a decent dual core with decent amounts of RAM and a moderately up-to-date graphics card. Causals run whatever works, usually single cores with shitty amounts of RAM and a HDD that's begging to die. If you are going that route, I recommend lowering your standards way way lower -- think SM 2.0 for anything 3D and 2D for anything that's going to run on "everything".

DX11 is going to be for the esoteric group of users for quite a while yet. DX10 and 9 along with SM3.0 are safe for gamer standards but some still run high-end DX9 cards that were snitched during the DX10 frenzia (or they never bothered to upgrade in the first place).

Krohm's got you pretty much hooked up with the hard data. Good news is that hardware is getting faster and cheaper constantly. Bad news is that us high-end users sit on tons of features that will only in the coming years trickle down to mainstream audiences. So, take your pick for an audience and get cracking!