Best thing you can do at this point is build your PC, part by part. While in college, I wanted a phenomenal gaming system, but on a typical starving student budget I was unable to afford one. So I bought and built it, part by part. Your first and foremost objective is to have in your mind what the completed PC will do. Don't be generic "omg lol I want to play gamez and frag noobzorz" but have a focused and specific idea.
Buy your first part. Of course, it's going to be a case. Just starting off, get yourself something decent, but affordable. my college PC had a case that cost me $50. If you're looking to inevitably build a decent system, the next step would be to purchase a decent power supply, typically 550W to 650W. These run about $100. I'm personally a fan of the modular power supply, which allows you to add power cords as you need them, thus increasing airflow and reducing the "spaghetti effect".
Afterwords, purchase yourself a motherboard. While everyone is pushing 64-bit as the way to go, save yourself some cash and consider things beforehand. Motherboards have a variety of functionality, make sure it's what you need versus what you want. unless you're going to be importing and exporting raw video and audio files in large portions, a firewire port is largely unnecessary. In order to determine what kind of system you want you have to consider which direction you're going with your PC project. Will it be AMD or Intel? Intel still offers a more than decent 32 bit solution, while if you want 64, AMD is really the best there is. AMD does offer a 32 bit solution with their Sempron line, but in my five year experience as a bench tech, I've found the Sempron processor to be lacking in performance and generally flaky in terms of higher-order processing.
Next, you'll pick your poison in terms of video cards. Video cards are no longer the hulkingly expensive monstrosities they used to be, but they can still be expensive on a limited budget. You still have the option of AGP for the next two years or so; a brand new PCI-E card may be a bit pricey. ATI has been seen to suffer in terms of benchmarks against Nvidia, and additionally, ATI doesn't seem to yield higher bench scores when paired with an Intel processor, when compared against a AMD/ Nvidia system of comparable caliber. Plus, Nvidia is still known as a 'budget gamer's boon'.
next is RAM. RAM is no longer terribly expensive, where you have to auction your mother's kidney for a decent high performance stick, but it's still pricey. If you pick a board with DDR2 standards, you'll end up shelling out more for the RAM, and IMHO, you won't see a verifiable benefit against DDR1 unless you go extremely high-end with your RAM speeds; I've seen higher performance with DDR1 RAM at high-speeds (PC3200) compared against a system with PC5400 (low, in DDR2 standards) DDR2 RAM. RAM usually runs between $130 to $300, depending on where you shop and your brand name. For the budget gamer, I recommend nothing else than Kingston. They're the only 'budget RAM' company I've seen with a decent RMA policy and Warranty. For high end, Crucial and Mushkin RAM are unparalleled.
Hard drives are the cheapest I've ever seen. I remember when you had to shell out out anywhere between $5 and $10 a gig, which was murder if you wanted a 60GB hard drive. Now, prices couldn't possibly be any lower, running anywhere between $0.20 and $0.50 a gig. Meaning you can pick up a 300GB drive for less than what you paid for on your video card.
I personally recommend you buy two hard drives. One for your operating system, the other for data storage. If you download a movie, song, copy a picture, write a story, edit video footage, what-have-you, put it on the second drive. install all your programs on your main drive, the one with your operating system, but store all your data and multimedia on the second. If your OS does crash, or if you have to perform an emergency format, you haven't lost anything except time.
You now have the minimum parts necessary to boot up your system, and you also now have strutting rights when you compare your home-brew box against your friends' brand new Dell.
