A system for what you wanna do... very cheap.
(Prices based on athlon xp)
Case w/ PSU - $30-50
Mobo (integrated sound/nic) - $50
Processor - $50-100
RAM (512) - $75
80 gig HD - $50 (160 gig drives go for $90)
Video card - $50 (?) unless you get integrated. If it's integrated on an asus motherboard, you should be good to go. Integrated Nforce chipsets are like having a stock GeForce 4 MX.
DVD/CD writer - $30-70 (DVD burner is $70)
Total - $445 (about)
Intel chips handle multimedia better than AMD chips, but... if you're just listening to music, running office, and playing DVDs, an Athlon XP should be decent. The only time it's noticable or when one would REALLY care is if you're making something like a PVR (Tivo type system) that relies heavily on video/audio encoding and playback.
The debate rages on as to which manufacturer is better, but in my experience in working with Intel/AMD every day, I prefer AMD. They just run a lot better, IMO (a bit hotter than intel, yes, but better performance wise). Athlon XP 3200 will perform ON PAR with a P4 3.2 ghz and is MUCH cheaper.
If you want a monitor.. I think decent 19" goes for around $200, or you could get a flat panel since you initially expected to pay around $1000-1500.
But damn, for 1500 on a CPU, you could get an Athlon 64 3200 w/ a good cooling fan, 1.5 GB ram, 160 GB drive, Nvidia 6800 GT (bad ass graphics card), SB Audigy 2, Surround sound speakers... hell, you'd have a VERY nice CPU if you want it to be in the $1000-1500 range (which is honestly a bit overkill, but hey, the power is DAMN nice), but again, for what you want, $1000-1500 is WAY too much.
Hell, even $600 for a case and all the goodies is too much. Generally a pretty up-to-date system will cost you around $400-500 (not including monitor)
[edit]
http://www.newegg.com is by far the best place to buy computer products from. VERY cheap, and very good reputation.