If you feel comfortable fiddling around with something new yourself, you can build an incredible AMD based machine for around $500 these days. Newegg's running a special where you can get an AMD 64 3400+ (socket 939) and a motherboard for $99. Throw in a gig of ram (~$120), a big HD (SATA 300-400 giggers go on sale regularly for 90-100 if you keep an eye out, maybe $130 regular), a cheapo PCI-e video card (as much as you want, but ~50 on the low end), a tower (~50), and a power supply (~30) and you're good to go.
At $500, depending on what you can harvest from the emachine, you could even be getting into C2D range, which is the best bang for the buck out there, and easily overclockable. If you can use your same video card, hard drive, case, and power supply, you can upgrade the RAM, motherboard, and CPU for about $400. (Less if you don't want to go with overclocking, because you can substitute a much cheaper motherboard.)
With Intel offering a great price/performance ratio on its Intel Core 2 Duo line and AMD madly slashing prices almost daily to compete, now is an excellent time to be in the computer market.
As a bonus, either option is Windows Vista ready, so you're future proofed (for a given definition of future, anyway
), which you may not get with a refurbished Dell. Of course, this may not even be a concern for you.