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Well it depends on whether you wish you want to go AMD or Intel. If you go AMD you can save some dollars and get better preformance. Team it with an nForce2 or 3 and you can get great performance and good overclocking possibilites. You could go XP-M but that and the mobo may cost a bit too much. For the RAM, go dual channel, twin 512MB if you can afford it. Kingston or Mushkin are good brands for RAM. If you go Intel, look for at least 3.06 with HT. Look for models with 1MB of cache - good performance. Intel chipsets are the best, and ASUS mobos are the best. Think P4P800 Deluxe or the like. Hope this helps.
obviously, you can get a computer for 227$... but like you said, lets try and stay around 550$.
Ok, so there are two roads.................. AMD XP and Intel P4.
The P4 will (in general) "feel" better due to the HT technology. but obviously amd XP has its high points. Im a fan of the DFI mobo's..... and corsair memory.
602$US... not bad. The P4 set-up will probably preform better in general, like i said before for about the same price do to dual channel memory and HT technology. And the fact that the P4 runs at 800mhz FSB helps also ^_^.
Another consideration for this price range would be the amd 64..... but i did not list that because its about 100$ over your budget.
This is just my idea of a darn good system for the price!
You can easily go Athlon 64 at that price point. If you're looking to spend that much, going Socket A isn't all that smart. Even if Socket 754 won't be the performance platform of the future, it's got more of a future than Socket A and already performs much better.
EDIT:
On the cheapest from Newegg (note: only one free gift per order, so split to multiple orders if needed):
So, with cheapest Mobo, CPU and 1GB of PC 3200, total cost = $409 and you get a pen and an alarm clock too. You can use the remaining $91 - $141 to do better than just the cheapest, or you can save it for later upgrades. You might as well go cheap now if your going to bother upgrading now.
IMO, if you can hold off for 6 months or so, you're likely to do far better for your money than any other 6 month wait in a long time. PCI Express should be available by then and, with luck, you can get a not too expensive Socket 939 mobo with PCI Express and a CPU to go with it and have a decent upgrade path for the following couple of years.
You will want 1GB of RAM so make sure you figure that out of the $550 first before you decide on the CPU your getting. 512MB isn't going to cut it in newer games and theres no point in having a high speed processor if your RAM is lagging your gaming potential in Doom 3 and HL2.