At Dell outlet store, you can usually find a decent Precision T3400 with XP, 2G RAM, NVS 290 video card and any C2D CPU for about $600 + tax, shipped.
Compare prices for locally built. Be sure you're comparing with either a P35 or X38 mobo. (Most of the prefab computers at BB or CC, HP and Dell have cheapo mobos with onboard video.)
As for monitors... 24", 1920x1200 are nice. From about $360-$600+ depending whether you want one with an S-IPS or S-PVA panel, or whether a TN will do for you.