My suggestion (the "buy it" side of things).
Dell Vostro 220 minitower (buy from small and medium business area, which individuals can buy from) with:
Intel Core 2 Duo E5200
2 GB RAM
160 GB hard disk
only 300W power supply though
cost from Dell = $350
or
Dell Studio Desktop with:
Intel Core 2 Duo E5200
2 GB RAM
500 GB hard disk
only 300W power supply though
cost from Dell = $370
Graphics card:
nVidia Geforce 9600GT with DDR3 vid. mem and 650 MHz core, specifically:
eVGA version from Newegg.com
http://www.newegg.com/Product/Product.aspx?Item=N82E16814130424cost from Newegg = $90
or
Radeon HD4650 with DDR vid. mem, specifically:
Sapphire version from Newegg.com
http://www.newegg.com/Product/Product.aspx?Item=N82E16814102838cost from Newegg = $50
total cost = $400-$460
This is a better system than I have currently, and I run at 1280x960, maxxed out 8xS antialiasing (which requires a lot of GPU effort), maxxed out graphics-quality settings in the nVidia controls, graphics sliders in AH all maxxed out, AH hires texture pack (which supposedly takes a lot more GPU), and get (depending on the action around me) 50-72 frames/sec.
So, the above probably isn't a minimal system, but you don't save much as a "buy it" system getting less than that.
The one concern is that the machines have 300W power supplies (not all that much). I've found in the past 300W to be OK, though -- but you could buy a larger power supply and install it for another $50 or so if you run into problems.
