I'm pricing desktop systems for work, and am finding base-unit (CPU, w/o monitor, though may include K/M), for as low as US$375. Raising that to $550 or so produces an entirely respectable IDE unit with network, decent video, and sound, and a healthy chunk of memory (512MiB). From there, upgrades would include SCSI, higher-end video, and peripherals such as tape, CD-W, DVD, etc., but not necessary.
The line that computer prices don't change, the specs just rise, is not true. Specs double on Moore's schedule, prices seem to fall about 5% per year, and this has been accelerated by the current soft market. I'd probably spec out a few systems and pick up at least two. Then spend the remaining grand and a half on a nice trip.
OTOH, if you just want to gold-plate a system, see [link|http://www.tuxedo.org/~esr/writings/ultimate-linux-box/ulb2001.html|ESR's dream box spec]. Even bricked out, he couldn't raise the price over $7,000, and halving this is eminantly possible. Extras include a really nice case, quiet fans, and mondo power supply.