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My recommendations:
Of course you could go and buy parts and build your own computer according to the budged you have but as it sounds you don't look like someone on the know ( no offence) so your best option is to find a local dealer and purchase it from there of course you could go and shop around for best prices.
to give you some ideas i'll write some PC packages that are available in Melbourne...
1-Duron system: AMD Duron 1.2 Ghz, Asus Mb, 256 SDRAM, 40gB HDD etc. $530
2-Intel P4 2.4 Ghz 533Mhz front side bus (FSB), Gigabyte m/b, 40gb hdd, 512 MB DDR RAM, 17" Digital Monitor, 300W poer supply, 52X speed CD Writer, Yamaha Sound (possibly on-board!), KB, Mouse, Juster Speakers, 56K internal Modem $1095
3-Intel P4 2.67 GHz, 512 MB DDR RAM, 80 GB HDD, 64MB graphics card, 19" Flat screen monitor
DVD-RW- Burner K/B, Mouse $1499
Some AMD Athlon-XP systems offer similar capabilities with little less pricing but I'd go with Pentiums. Computers never been this cheap with such performance increase. Its time to buy a new one 
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