[For motherboard upgrade in 2008, see §15.5.]
This was my third home-built system, and my second Linux machine:
The above six items cost close to $900 from newegg.com.
In summary, this was a new machine with a second-to-fastest CPU (one could get 3GHz), lots of fast dual-DDR memory, two large and pretty fast disks, and relatively weak graphics. I love the flat-panel display, and don't feel it needs to be larger (even though I'm used to a 21" Cornerstone analog monitor).
I had planned to make a Raid 0 array out of the two SATA hard drives, as tests have shown that you really do get a 2X speed-up, and disk access is by far the limiting factor in speed. However, the Red Hat 9 kernel at the time did not support the SATA control chip on my Gigabyte motherboard, so I had to give up on that. Now I just use the second disk for mirror-based backups with rsync (see §7).
The Gigabyte motherboard is aimed at the server market, but I like it because it is so crammed with hardware peripherals on the board. Forget about technical support, however.
It's pretty neat having so much hardware on the motherboard, once support appears for it in the Linux kernel. (For example, the Intel networking chip was not initially supported, but is now.) I've also been able to get pretty far without a sound card (using the onboard Intel CODEC AC-97 chip). However, the jack server frequently hangs, possibly due to a lack of buffering, so I'm going to get a real sound card and see if that helps. I plan to get a Creative Labs Audigy 2.
I may also break down and get a more powerful video card, as the Radeon 9000 is quite noticeably behind the times for games.