I don't really play games anymore, at least not new ones, so any bargain basement computer tends to be pretty useable for me. I probably spent about 300$ on my current computer and it's more than adequate for anything I throw at it. That was 300$ after a 2GB memory upgrade and 1 Gbps network card. The base price of the unmodded system was about 250$.
Mind you, I got it from a second hand computer store, and it was the last of it's kind. It appears to have been a business machine that got sold for some reason or another. It's got a 3 GHz hypterthreaded CPU. It only had 512 MB of RAM (hence the upgrade), and an 80GB harddrive though. But that's still way more RAM, and the same disk space as my old computer.
In other news, I hear you can get certain 2TB harddrives for about 130$-160$ these days. Certainly the 1.5TB drives are available at 130$. Perhaps overkill though, so if you don't need that much, than yeah, get a smaller drive. Still, it seems like decent value, particularly if you're the type of person to use whatever space you have.