The other guys here are pretty good at doing this. I will go ahead and suggest looking at the "Hot Deals" thread you can pick up Windows Vista Home edition 64 bit version for 80 bucks shipped. I would get that now just to make sure you get the sale price. Also you can get a lite-on keyboard from Newegg for 6-7 bucks and mouse combo around ten plus shipping. The keyboard is basic, but well built. The mouse...eh its about two feet long with two buttons lol. But with your first hundred bucks you will have that out the way.
Sorry for that running together, I'm doing this on my PS3 with the controller.
I would think AMD would be a better route to go especially on this tight of a budget. The x2 2.7ghz are 55 shipped.