My advice would be what I did:
Geforce 7600 GT 256MB DDR3
AM2 socket motherboard
DDR2 ram, 1GB at the least (pref. 2GB)
AM2 socket athlon 64 (pick this last to "maximize" your power vs cost)
Audigy 2ZS soundcard, but only if you can afford it, if not, stick with the mb sound for a while.
the above should give ya a damn nicely balanced price/performance system, and since AM2 socket is quite new your system will be upgradeable for many years to come.
You might wanna go for a cheaper cpu and get the "good" cpu some time in winter/spring as new AM2 dual cores will appear then (and quads) for full, meaning single core AM2 athlon 64 will be very cheap, even the 4000+ and 5000+ rated ones.
if your PC case is ATX you can re-use it.
ditto with the PSU if it's ATX, make sure it's around 350-400watt though.
Hard drives can be reused. same with burner/cdrom/dvdrom, mouse, keyboard and all stuff like that. so don't waste money on them right now.
I can run any game available with good performance even with settings maxed,
older games (like AO etc) I can "force" (driver application profiles) 4x antialias and 16x anisotropisk and AO look amazing. straight lines, no jaggies, and smooth textures as far as the eye can see. (or AO is able to render that is
