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Here is a 625$ gaming rid designed by professionals
http://www.tomshardware.com/reviews/overclock-e5200-radeon,2144.html

I suspect you can save some money using some parts you already have, like your case and Windows XP.
Keep in mind that this build is geared specifically towards overclocking. It is OK if you don't want to, but if you read the article you can see what they do with it.