Cheap, comes with everything to get started, after 2years it still works

Pressurized portafilter, small boiler with poor temperature regulation, small water container, small drip tray, high water content and steam content out of steam wand

So I've had this machine for 2years. The first year I spent in ignorance of shot quality. This past year, after a trip to Italy, I really got obsessed with makng a good shot at home.
The pressurized portafilter definitely helps the novice barista make an espresso. Just dump grinds in the basket, push on it with the plastic spoon thing (comes with the machine), turn it on and presto black liquid comes out. However don't even bother drinking it like that straight... Not even with fresh ground fresh beans. But, with sugar and steamed milk it's ok.
Think of a pressurized filter like this - The grouphead has approximately a 9bar pressure drop from boiler to cup. However the pressure drop is not across the coffee with a pressurized portafilter, but the across the filter itself... There in lies the problem.  
However, this machine is capable of much more! I hate getting "up-sold" as much as the next man, but i think every coffeegeek would agree on these bare-bones minimal additions... You'll need a reasonable grinder ($200 plus), fresh beans (of course, but a luxury item in some parts of the country) , non-pressurized portafilter (hard to find, got mine from seattlecoffeegear - $25), and the right sized stainless steel tamper (again hard to find due to small diameter portafilter, try espresso parts - $30, this really helped me get a consistant tamp pressure).
So that solves the espresso problem... Now you can play around with the "1.5-2oz in 25sec" rule to get some drinkable espresso :) (however don't beat yourself up if you're striving for perfection, remember that this machine has a small boiler a pretty crude temperature regulation).
As for milk... The steam wand puts out a lot of water. It's only a small boiler, and incapable of producing superheated steam. However, if you "milk" (excuse the pun) the steam wand into a spare cup for 1-2mins til the water content drops off. Then, after reading the "milk steaming how-to" on the coffeegeek site, I can get something close to microfoam (with the steam baffle thing removed). I've found that 2 capacinos worth of milk (2/3 of a cup) is about the max it can steam at a time.
After 2 espressos, steamed milk for 2 capacinos, plus flushing of the group and steam wand... The water tank is down to about 1/4 full.
One last item, at the 2year mark the boiler heater gave up on me. I opened it up and found the connectors to the heater element had burned off (little scary). But I just soldered it back down and it works great now.

Good, although next time I'd buy from a dedicated espresso/coffee store