The name Lubuntu is a combination of LXDE and Ubuntu. LXDE stands for Lightweight X11 Desktop Environment.
The objective of the Lubuntu project is to create a variant of Ubuntu that uses LXDE, the Lightweight X11 Desktop Environment, as its default GUI.
Lubuntu is targeted at "normal" PC users running on low-spec hardware, without enough resources for all the bells and whistles of the full-featured mainstream distributions. Therefore it occupies the stripped-down, low memory footprint class of distros, with over a thousand Ubuntu packages available in its repositories.
Including stalwarts such as Firefox for browsing, Abiword and Gnumeric for office use, Lubuntu has some unusual software choices; Cheese is an image viewer with basic editing functions, pyNeighborhood manages Samba tools, while the selection of music players includes Aqualung.
Distinctive applications are the utilities written especially for LXDE, such as the PCManFM file manager; LXTerminal, the command line window; LXPanel, the desktop panel, and LXMusic, the music player. PCManFM is a two panel file manager stripped down to the essentials similar to Thunar.
It works very well out of the box; it looks pretty with the LXDE desktop and you can add whatever packages you want through Synaptic. It is however, so stripped down that if your user is a beginner, they may quickly grind to a halt in trying to configure hardware and install packages.
My test configuration: Lubuntu Linux (based on Lucid Lynx Alpha 2) 32bit, inside virtualbox 3.1.4 in Ubuntu Lucid Lynx 10.04 32bit, on Pentium IV, 1GB RAM, GeForce440MX graphics.