I built my first pc about a year ago now... and about a month ago I built my present beast.. still upgrading.. just remember if you dont like something in your pc you can always upgrade it after a while.. I started out with a pentium celeron processor 2.0ghz oc to a 2.7, with a cheap motherboard and 1gb of value ram with the same videocard I have now... it worked and played games like a pro... now... its a lot faster
of course I only played counter-strike back then...
For cheaper computers I would go with Pentium just because motherboards are cheaper for pentium and sometimes so are the processors...
$700: intel celeron D 2.66ghz processor ($92), ASUS "P4P800 SE" motherboard ($95), corsair value ram 512x2 ($132), and a good 480watt powersupply and case of your choice with a ATI 9600 xt ($140)
*prices according to newegg.com
hope that helps you out a little... that system will play just about anygame out there... not full graphics but a worthy first pc.