I have a 520c running System 7.5.3 with 8MB RAM and it is quite usable. I might change it to System 7.1 though as it is a little limited on memory when running larger applications. Other than that it is a good machine and the built-in ethernet is a nice bonus, (as mentioned above, you will need an AAUI to RJ45 adaptor to connect it to a network). The screen on the 520c is also fine in my opinion so long as you get the brightness and contrast settings right. It's never going to be as good as the 540c active matrix but it is by no means terrible.

If you're looking to play with WiFi I would suggest getting a PowerBook model that has built in PCMCIA slots, mainly because it is nigh on impossible to find a suitable 500 series PCMCIA "cage". The 5300s and 1400s make pretty good retro WiFi machines.