Well building a budget PC with very, very good price-performance is definitely not impossible. For $115 from the ground up I built this PC:
- AMD Athlon II x2 245 [$25] + stock cooler
- ASUS M2N-E [$5 - NCIX warehouse sale]
- 2x1GB OCZ DDR2 [$20 - Craigslist]
- PNY nVidia GeForce 8500GT [reused, free]
- WD Green 2TB hard drive for storage [$40 - NCIX warehouse sale - recertified] + WD 80GB hard drive for OS [reused, free]
- Antec 300 - [$10 AR - NCIX, in-store price-match]
- Antec EA380D PSU [$15 - NCIX warehouse sale]
This PC serves my HTPC right now. Of course it took a lot of scouring and a lot of good deals for this to be possible for me. Many of the parts are used. Brand new, these items would run over $300.
My advice, since you are unlikely to find the same deals I have found: split up the load. If you can get some less relevant items on Craigslist (i.e. CPU, maybe RAM) while spending more on certain others in-store (i.e. a more reliable PSU), you can get a great deal.