Who to buy from?
Dell. Period.
I’ve been buying Dell machines for years. Nearly every IT professional uses them as well. The components are generally a grade above the competition and the machines are usually easier to perform maintainence on.

How much stuff do I need to buy?
If you want to do anything but the latest games and graphic design, generally the cheapest you can find. Honestly. You can get a computer these days for less than $500 that comes with a new display (aka monitor). Let’s work through a few more details though…

Windows vs Mac
I can fix both machines and they both are good and bad. Personally, I favor Windows machines. Sure, you can be trendy and buy a Mac, but look at the software you use at work and see if it’s available on the Mac platform. Unless you’re in design as a profession, chances are no. I’m a senior webdesigner and I use all sorts of art and design applications and I personally have found that they, as well as most other programs, are better on a Windows platform than a Mac. This is my personal preference, so YMMV.

Windows Platform
If you go Windows, you’ve got 3 different Operating Systems to choose from:
1. Windows XP. Venerable but trusted. Several of my machines still run XP. It’s very stable and does what most want it to.
2. Windows Vista. Shiny and good. Vista got a bad rap because manufacturers, not Microsoft, didn’t catch up. Vista had some issues here and there, but it was not Microsoft’s fault. I have a machine with Vista and it runs just fine.
3. Windows 7. 7 is rumored to be out Summer of 2009 and is essentially rebranded Vista. Honestly. Microsoft is trying to recover from the negative image Vista obtained and move forward with a new name.

32-bit vs 64-bit?
The bottom line: buy whichever is cheapest.
A slightly longer explination: the number of bits is how much information the processor can process per clock cycle (there are 16 clock cycles per second).
If you’re going to want more than 4 gigs of RAM, you’ll need 64-bit.

RAM (aka memory)
If you’re getting Windows XP, 2 gigs is fine, 4 gigs would be a bonus.
If you’re looking at Vista or 7, you will need 4 gigs minimum. 6 or 8 would really future-proof your investment.

HDD (aka hard drive or storage)
If you’re not going to get every music track, get the smallest size available. Most of my clients never use 10% of their drive. If you have internet-savvy kids, you’ll want to go larger. Most people won’t use more than 10 gigs their entire life. I’ve seen internet-savvy kids use in the thousands of gigs (basically 1 thousand gigs is called a terrabyte or TB).

Display Adapter (aka video or video card)
Are you going to play those really intense shoot-em-ups? Do you need to have 2 or more monitors? If no, whatever comes with it is just fine for you.

If you need 2 monitors, look for a "dual head" display adapter.
If you need games, look forward to spending at least the price (sometimes 2x!) of the computer’s price again on the latest and best.

Display (aka monitor)
Let’s get some terms out of the way… "Flat Screen" is not the same as "Flat Panel". The original displays (CRTs or cathode-ray tubes), when they were huge had a curved glass front. Eventually a method to have a flat piece of glass came out called "Flat Screen". Now we have these skinny little panels 1-2 inches wide. These are called "Flat Panels". They also have flat screens, but that’s not what you call it.

Why do you want a new display even though your huge old CRT display works just fine aside from that smudge no amount of Windex can get off? It’ll save you on your power bill. Not only does that huge monster cost more to power, it lets off copious amounts of heat which your A/C has to combat, costing you more money!

More programs, games and website are being designed with the 16:10 widescreen format in mind. Things won’t look right soon enough if you don’t catch up. 19" is the standard of today. If you’re buying for someone with poor eyesight, you may want to go bigger.

Software (aka applications and programs)
You don’t need to drop tons of cash to make your computer do what you want. There are tons of free games and programs out there. You don’t need Microsoft Office, you can get by with OpenOffice.org.

Conclusion
Don’t spend money if you don’t need to. You shouldn’t expect to spend more than $500 on a machine. It’s easy to spend alot but you really don’t need to.