I don't have much to add to what Moho has posted, very well covered. Just a few comments..
With a little experience with a soldering iron and attention to the circuit "map", one can assemble one of these tiny amplifiers fairly quickly and easily. And, you will more than likely have parts left over for another 4 or 5 builds depending on the bulk packaging of the components. They can be encased in the guitar itself or externally in another cigar box, a biscuit tin, etc. A matching amp and guitar make a nice presentation gift.
These amps, as a stand alone, are quite limited, IMO. So, before plugging that iron in I'd suggest listening to a few examples of their sound. Here's one, there are many on YouTube.
http://www.youtube.com/watch?v=cBRxnAIPRqw
They don't work half bad as a pre-amp, however. But, now you're looking at additional equipment.
I've built several and will probably build a few more for kicks and grins and to use up my parts stock ... but, I am currently a big fan of the Danelectro Honeytone amp. For $20(US) ya can't beat it. It has loads of tone, from a raunchy overdriven distortion to a clean almost tube-amp sound. No, it won't sound like a cabinet Fender or Marshall stack but it, IMO, is a huge improvement over the 386's while still remaining price competitive. Caution: it has a healthy battery appetite. Can you yank the guts out of it and install it in a cigar box? Sure.
http://www.amazon.com/Danelectro-N10B-H ... B000B6DHB2
So... I suppose it's a worthwhile project for an apprentice builder (I don't regret my time spent building them) but it's not the biggest bang for your sound bucks.