Pentium 3 866 mhz - GeForce 2 400mx video 64meg - 40 gig IBM hard drive, Plextor 16x CDRW - 256mb Micron ram - Creative Labs Audigy soundcard - Hitachi 19" monitor. All this wonderful hardware nestled in a PC Power and Cooling case, throbbing delightfully under the reigns of Windows 98 second edition. If I didn't occasionally play a game or two, I'd be running 2000 professional, which is really a solid OS.
My machine may not be the fastest as far as clock speed goes, but it is stable and rarely gives me a fit. I make it a point to only buy the best pieces of hardware available. Generic stuff is generally more apt to have undesirable issues. In fact, high quality older stuff is often better then low quality new stuff.
Jon, don't waste your money adding more ram. 512mb is plenty, and is actually the sweet spot for XP, unless you are doing really intense graphics and design stuff.