You can get a lot of cpu power for under $300... I think the sweet spot is around $250 for an intel cpu, 2 cores running somewhere around 3ghz. Of course, if I was going to buy today I'd be getting the new 3.0 ghz quad core Q9550, an ASUS P5Q Deluxe (or some sort of P5Q), and 2x2GB DDR2. Top it off with an Nvidia GTX 260 and there's your system refresh for the next 3 years.
I priced all that out at newegg today and it's just a tick over $900.
But yea, Intel is king this tech refresh cycle. I went with AMD last time because I couldn't stand the Pentium 4 but AMD has stagnated and after they abandoned socket 939, I have no incentive to put more money into a second-rate cpu. If there was a nice fast socket 939 cpu I could get a nice jump in speed without replacing everything else but as long as I'm going to have to replace the mobo anyhow, I might as well go with Intel since it's faster and the underlying technology is somewhat better. AMD has some good tech but the fact is that Intel is faster and consistently more upgradable. AMD abandoned their premium socket during a minor tech refresh cycle, while Intel has been using the same socket for years with HUGE speed increases. Buying AMD now is just dumb, unless you're REALLY on a tight budget and then in that case, I think AMD is a bit cheaper for a low-end system.