IMHO, the 3 most critical factors for reasonable Photoshop host environment are:
1) Suitable memory - I say 2 GB.
2) A quality monitor, at least 19 or 20 inch.
3) Color calibration device.
Those options alone will probably add almost $1000 to the basic $500 bargain basement PC (which also may not have enough HD to hold your files, but that is not expensive to rectify).
Processor power is not that big a deal for casual users. Just get a mid-range chip.