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Seriously, now is a very nice time to build a computer.

Core 2 Duos are cheap as hell for such a fast processor.
Memory prices are bottom pit low. You can easily get 2GB of good brand memory for under $100.
HDDs are cheap too. 500GB for under 90$.
The only category that price hasnt dropped dramatically is the video game market but there are nice options around the 250$-350$ sweet spot.
I would get a ATI 1950XT or GeForce 8800 GTS.

Here's a good guides for picking parts, give it a read

http://techreport.com/etc/2007q3/system-guide-0707/index.x?pg=1



crappy old school NES games are more entertaining than next-gen games.