Yeah, I think I spent almost as much as my monitor alone in my last big PC purchase, and it's definitely been worth it. But nowadays it seems you can get a decent 19" LCD for around $200 (IIRC, there was a Samsung advertised at that price), though I guess you'll want widescreen for movies and future games (plus,
if it can rotate, you get the perfect layout for webpages). You might want to consider a monitor with HDCP
if you're interested in HD content.
Apparently you are interested in speakers, too. I'll just say, price being equal, I'd prefer a more musical 2.0 set (like the Swan M200
mentioned frequently at Ars and that's occasionally in stock at NewEgg for ~$200) over a more forceful 2.1 set. I value a full midrange more than boomy bass. The only reason I have my Logitech 2.1 set (Z-2200) is b/c it was super cheap at the time, but it defaults to a pronounced high and low end, with not much in between: fun for games and action flicks, not so much for anything else. Plus, it matched the pretty unique "metallic bronze" color of my Antec case.
I dunno, I'd be surprised if you couldn't get a pretty kick-ass Core 2 Duo setup together for around $700 before the external inputs and outputs. I think a C2D 6300 is ~$200, a
MB maybe $150, 2x1GB RAM ~$200, a _quality_ PSU and case ~$150. I think you can transfer your copy of Windows. That's $700.
Gah, I guess that's before a video card, so you can toss in something affordable like a ~$100 7600GT for basic use, or move up to a ~$200 X1950Pro or the like for higher res and more AA, or just go whole hog for a GF8800GTX. Personally, I'd wait until January (supposed NDA lift date) to see how R600 compares to G80. You can get by just fine with a relatively cheap 7600GS or GT, which you can then resell for probably not much loss to move up to the enthusiast-class $300+ GPUs.
And that's assuming you want the creamy smoothness and generally superior gaming performance of a C2D. A single-core A64 may suffice.
Even so, sounds like you could afford a 24" widescreen LCD and some decent speakers with a $2k budget, and you can assume the monitor and speakers and probably case and PSU will last for a few upgrades. Still, as power-efficient as they tend to be compared to CRTs (I'm on a low-power kick, considering I spend much less time gaming than browsing, typing, etc), I have no idea if they're suitable for gaming for picky types like me (even watching HDTV, there's a difference in clarity b/w LCDs and plasmas when the scene pans). Again, BeHardware has a lot of great LCD reviews.