Craigslist seems to work pretty well for Muggles. I'd say most people can handle an ugly UI if reward > cost.
Having said that, I haven't found a mockup I prefer over plain HN either. It's about the content. Design largely stays out of the way.
Another thing I think the current HN design does well is act as a filter or repellent. Hackers can typically deal with an unattractive interface, whilst the average person would be turned off and leave the site. Those who stay on the site do so for its content, they don't need any extra convincing to stay.