its not too hard; in short, here goes:
1st the choices:
1 - operating system - win xp is best ms offering at this time.
2 - architecture - say, p4 dual ddr; cpu choice dictates your mother board selection and vice versa; p4 2.4's (400 mhz dual ddr) can be had around 170, mobo around 120. Intel's 865 and 875 chipsets are great.
3- memory - match memory to cpu and motherboard chipset - for the cpu above, you want pc3200 memory, 2 sticks.
4 - what can you salvage from old system? hard drive? maybe, vid card? maybe if its good; sound card? maybe, if its good. Monitor? speakers? keyboard? cd rom? floppy drive? you may have to get usb joystick if you have a sound card type, or still use sound card.
-so the first 3 are the biggies - cpu, ram, motherboard, o/s.
you can a motherboard with decent sound and lan onboard, so scratch sound card, lan card; here is your shopping list
-motherboard
-cpu
-ram
-OS (of course, win 98 works but hey, xp is smmooooth)
-hard drive
-cd rom/dvd/cdrw although plain cheap cdrom is fine
-floppy drive, makes life easy
-video card
-keyboard mouse
-case with p4 compatible power supply
-speakers
that is a basic list. these days, if you are careful, you can assemble a pc in a few hours and be running. many people buy top of the line (note $$$) components then overclock. I for one just run stock, rather than spend several hundred dollars extra for cooling, cas 2 ram etc, i'd just as soon just buy a better proc right out of the box. but some guys build hot rod cars, others build hot rod pc's and i say more power to them! but for ah, you can run great stock.
check
http://www.googlegear.com or
http://www.newegg.com for great deals. I like googlegear myself.