Well, I am of the audience that says get the cheapest machine you can, as these things are really starting to become appliances. Get 2-3 years out of it and then move on.
I just had this dilemna with my parents. They needed a new PC and I needed to decide on the $350 cheap Dell or the $1000 Dell. Needless to say I went with the cheap one. It was $350, 2.4Ghz Celeron, 512MB RAM and 17" Flat panel with free shipping. This was a few months ago. No bells and whistles at all. All they do is surf the web and some word processing.
I figure when Windows Vista comes out, I certainly will give it some time to work out the bugs. By then it will be time for another $350 PC, and they'll be off and running again
I would not go too crazy MD. Remember, most of us are big computer geeks here. If your needs are just checking e-mail and surfing the web, than I would stay cheap and not go too crazy. Technology is changing so quickly now I can't keep up!
The TV, on the other hand...