Apple's refurbished machines are basically brand new, but didn't pass quality tests for rather simple things, such as the packaging is dinged or scratched.
My office had about 15 iMacs 24" from about 4 years ago. They were all refurbished and we were assured that there wasn't anything wrong with the refurbished machines. We've seen about 6 hard drive failurs and another 6 optical drive failures.
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