Dark,
Yeah, your better off building, but if your not comfortable with that I would just buy a descent prefab. There is some good deals out there if ya look around, and be patient. Just look at the specs that you want, or need or something thath as a little bit of longiveity.
Now. For the OS. Your going to be hard pressed for the latest hardware to actually have full driver support for XP, so your most likey going to have Vista (Which isn't bad as people claim, BTW) or you can wait until June get Vista, and then free upgrade to Windows 7 (Which I'm Enjoying greatly for Windows OS).
If you want a notebook? I suggest once again looking around, Dell Outlet does have some good deals. I got mine last year for 600, and all was wrong with it was a scratch. C'mon, a scratch most likey going to get moving around away. Might as well save from someone else arrogance, I say.
It's all up to you, Dark,
Ali