Gateway GM5084 Refurbished AMD Desktop Computer - AMD Athlon 64 X2 4200(Dual-Core) 2.2GHz, 2GB DDR, 320GB HDD, DVD RW Dual-Layer, Flash Media Reader, TV Tuner, Windows XP Media Center 2005 6923 in Canada at TigerDirect.ca
Is good. Use the rest of your $$$ on a better Video card. I'll let the gamers reccomend one, as I have no idea which video cards are the best. Most people here will reccomend you build one...do you think your proficient enough to do that? It is relatively easy, but if you've never opened up a PC, I wouldn't try it, but that's just me.
The pc I linked has a strong cpu, a good amount of ram, a big hd, ect. There are several on the site right around it, using cpus varying from x2 3600-4200 within $50 of each other.
If you buy that for $500, then use the remaiing $400 and then buy a monitor and a video card, you'll be able to play quite a few games with pretty good quality.