Extreme Tech shares the skinny on how to build a capable $800 gaming PC (sans monitor of course). The core components on their rig include an Intel Core 2 Duo E6300, 1GB of RAM, a XFX GeForce 7600 GT graphics card, and 160GB hard drive with XP Home edition.
The motherboard offers few upgrade capabilities, and the graphics card won't handle the most intensive games, but this little booger should get you by for a while if you're on a strict budget. And as one Diggster points out, don't waste $50 on the recommended sound card; integrated audio would do just fine in this case.
Ridicule if you must, PC purists.