I agree with all the above points of guidance. However, there is another bottleneck issue that needs to be considered depending on your application.
Gaming aside, lets say you work in word and produce long documents with lots of graphics. The size of the graphics card Video RAM matters a great deal.
I have had video cards with 4MB, 8M, 16,Mb, 32,Mb and 65Mb. The effect on the speed of page scrolling is extraordinarily dramatic. Between 4 and 64Mb the page scrolling time declines exponentially. The effect on performance and productivity is huge.
This should be less of a problem now that most graphics cards are reasonably fast. I’m not sure how some of the motherboards with onboard graphic chipsets (thus supposedly negating the need for a separate graphics card) fair under such tests.
In general I’ve found that the speed of the processor is less important than having high amounts of RAM and a good graphic card. Personally, I won’t now settle for less than 1Gb RAM. It doesn’t matter how fast the processor is if there are large bottlenecks elsewhere in the system.
Finally, good hard drives with disk cache also have a significant impact on some applications. So, for example, a Western Digital 80Mb drive with its own 8Mb cache significantly improves performance compared with some non cached drives. With disks such as these even the bloated applications of MS Office load in a millisecond versus the long wait you often see. Make sure you buy a good quality drive. Even the best drives fail remarkably often.