I think the Radeon Xpress 200 IGP is better. If you buy the Radeon Xpress 200 IGP, they throw in a free Socket 939 motherboard. If you buy a Radeon X300SE, you just get a slow video card.
Seriously though, my experience with the Xpress 200 IGP was all positive. I haven't read anything about the X300SE that indicates it would be noticably faster. The Xpress 200 IGP ran EVE Online (a DX9 title) perfectly well and provided very playable framerates for UT2K4 and Colin McRae Rally 05. You'd have to move up to a Radeon X700 Pro to significantly improve upon your framerates.
The X300SE, from what I've read, suffers from the restricted memory bandwidth on the SE version in particular. The standard X300 cards are better, but not worth the additional money vs. the Xpress 200 IGP. A Radeon X600 Pro/XT would be noticably faster, but the X700 Pro is so close in price to the X600 series cards that it really represents the best first step up from the Xpress 200 IGP.
I ran my Xpress 200 IGP for about ten days while I waited for my X800XL card to arrive, and for IGP, it is quite impressive.
Edit: I went back and re-read that Nov '04 article with the comparisons between the X300SE and the RS480 Xpress 200 IGP. The only resolution where the X300SE has an advantage is 640x480. At 800x600, the Xpress 200 IGP is just as playable. I had disregarded the X300SE's singular advantage at low resolutions. I don't want to play anything at 640x480 and I figured you probably don't want to either.