I just started lurking on these here forums, thanks in part to Cider's amazing posts on the WoW boards concerning tanking... </obligatory butt-kissing> Anyhoo, I felt compelled to respond to this, simply to give my $.02 on your upgrade issue.
Here's a list of components I came up with on Newegg, with a grand total of $620.94, before shipping.
Motherboard: ASUS M2NPV-VM Socket AM2 (this allows you a lot more room to upgrade in the future, unlike the older Socket 939, and also gives you the ability to use DDR2 memory)
Processor: AMD Athlon 64 3500+ Orleans Socket AM2
Video Card: eVGA GeForce 7600GT 256MB PCI-E x16
Memory: 1GB (2 x 512) Corsair XMS2 DDR2 675
Hard Drive (Optional): Seagate Barracuda 7200.10 (Perpendicular Recording) 250GB 7200RPM 16MB Cache SATA 3.0Gb/s
DVD Burner: Samsung 18x / 12x DVD-Ram
Case: Cooler Master Centurion 5 ATX Mid-Tower
Power Supply: Thermaltake TR2 430W
Optional: If you choose not to get the additional hard drive, I'd recommend one of two things -- 1) Upgrade the processor to an X2 4200 or similar (dual cores will help pick up the performance loss from the hard drive when it comes to the actual editing and rendering) or 2) Replace the onboard audio with an X-Fi Xtreme Music or Fata1ity, as they can both be had for fairly cheap nowadays.
For folks on a budget, sometimes you've got to compromise on one component to be able to afford another, more important, one. In your case, since you're going to be editing and rendering video, I would strongly suggest a SATA II HD with a 16MB cache. The faster speed and larger cache help cut down on lag and skipping you can experience when you're recording. If you'd rather not, you can always use one of the other options I posted as well.
Hope that helps.
