With that kind of budget, you can have a seriously badass system,
I'd recommend something along the lines of:
Athlon XP 2800+
nForce2 mobo with dual-channel DDR support
2 sticks of PC3200 512mb CL2 DDR
Radeon 9700 Pro video card
Dual 120gig WD Special Edition 8mb drives (I'm partial to that drive)
48x24x48 CDRW
430w Enermax dual fan PSU
You could also go all U160 SCSI, but that's probably not worth the extra cost. With the specs above, if I were building the machine for someone I'd probably charge about $2300 or so.