Humm. Well my build was originally a $1200 build before I decided on the 8800GTX rather than the 640mb GTS. I haven't had too much negative feedback, except from the occasional Intel fan.
Anyway, here are the basics for my build. I tried to go as cheap as possible:
makes the G.Skill RAM cheaper than the Corsair RAM.
AMD Athlon 64 X2 3600+ Brisbane 1.9GHz Socket AM2
G.SKILL 2GB (2 x 1GB) 240-Pin DDR2 SDRAM DDR2 800
Big Typhoon CPU Cooler
OCZ GameXStream 600W PSU
Western Digital Caviar SE 160GB 7200 RPM SATA 3.0Gb/s
Sony NEC Optiarc 18X DVDÂ±R DVD Burner with 12X DVD-RAM Write SATA 3.0Gb/s
HT OMEGA STRIKER 7.1 Channels
With all of that you run just over $400. So... that leaves mobo, GPU, case, monitor.
For my build, an SLI build, I had an XClio Windtunnel case, Acer 20" Widescreen and a Biostar TF570 motherboard, plus some fans, etc. With the GTX, I was able make a $1500 budget. Even with the 320mb 8800GTS, you would be over budget, especially if you need windows. If you want to go Vista, you can get a copy of Vista Home for $90 bucks. This puts you just under $500 total for the above stuff.
There's some room to drop the price down, too. If you want to go the 8800GTS route, the powersupply may be overkill. You could probably replace that with something cheaper. Also, going IDE (I don't recommend) would cut just a tad bit off the cost of the HD and opticals... That sound card may not be to your liking. I grabbed this one because it's cheap, and apparently pretty good.
Ultimately, the case, monitor and video card are up to you. I don't know anything about mobos, so I'll leave that up to everyone else.
Hope this helps.