Build your own. Allows future upgrades not all that possible with all those 'name brand' computers. I don't see why anyone would want to tie their hands behind their backs when it comes to upgrades. You get what you pay for. A cheap brand name computer is just that.
You can build a very decent PC for $500. And, you can upgrade memory, CPU, add raid, graphics.... in the future.
Vista? Stick with XP. Less of everything needed. You could always buy Vista later.
Memory: 1GB is plenty for XP and most apps. 2nd gig can be added when budget allows. But, 2x1gb ddr2 sales/rebates can be found for under $50.
Processor: Stick with dual core processor that is at least 1800mhz or faster regardless of brand. My single core Athlon3500 feels just as fast as the quad core q6600, regardless of silly benchmark numbers. I do notice the power difference when zipping/unzipping large files, and when file converting prior to cd or dvd burning. I can websurf/email and perform most office tasks(openoffice), burn cds.... with my P3 800mhz with no problem with XPpro.
I'm not a gamer. So, make sure your cpu/graphics power meets your game's requirements. Email/internet... doesn't need much power. Depending on game, you might even get away with onboard graphics.
Drives: 7200rpm SATA 300gb can be had for $80. Just grabbed a dvd burner for $30.
Pick any ATX computer case that you like. Stick with a name brand power supply since generic tend to die(and take components along with it).
Some things to consider:
Power supply: at least 400 preferably 500watts; ATX12v 2.2(preferred).
CPU- either AMD AM2 or Intel 775. You can get a decent one at a reasonable price. And, you can double CPU power when prices drop in a year.
Graphics: integrated intel, ati, and nvidia, are plenty powerful for 2d games, older 3d games, and all websurfing/email. Avoid Via/SIS based motherboards. I still build PC's using them but they don't support the future processors that will be released in the next 6-months limiting upgrades.
Powerful graphics can be purchased at another time. Graphics life cycle is just too short.
Motherboard: make sure it supports ALL the better processors(and future releases) for your brand/socket choice.
Make sure there is at least one pcie x16 for future graphics(and preferably pcie 2.0).
Memory: at least ddr2(pretty cheap) or ddr3
Sound: most integrated sound is good enough. But a single older pci or newer pcie x1 slot will be needed for future sound card.
Ebay is full of good used parts. All those kids dumping their 3month old dated components cheaply as they constantly upgrade for the newest fancy geewhiz games and components.
The internet is full of how to build PC tutorials.
PM me if you want an upgradeable complete component selection build if you go thru that route.