Is it really less expensive to build your own computer?  For example, check out this Dell:
 
Dimension9150
 
Specs w/ conservative price approximation
 
ATI Radeon X300 SE             $45
 
CD RW 48x read 48x write 32x rewrite        $15
 
DVD-ROM 16x             $15
 
512 MB DDR2               $50
 
3 GHz Pentium 4 w/ HT        $150
 
160 GB SATA                  $60
 
17" LCD Monitor              $160
 
Motherboard                 $80
 
Keyboard + Mouse          $20
 
Case + PSU              $80
 
Total               $675
 
Keep in mind, many of these numbers are complete guesses, so it is very inaccurate, but I was extremely conservative in the prices, so I'd bet it would cost at least $750. Plus, shipping and handling.  I know that homebuilt computers are much more upgradable and personalized, but is it really worth it?

There is no way a home build budget computer will be cheaper than a dell.
Dell get huge discounts and use cheap crap componets.
 
The difference is with homebuild you can put what you want in it and can use decent parts.
 
Now if you want a top of the line or middle of the road pc with decent components a homebuild will be cheaper.
 
Dells high models are complete rip-offs compared to home built especialy when they start charging $300 for an extra 1gb of ram.
 
Remember I live in the UK and that is the case here, may be different in the US.

I really think it depends on the individual and what he/she wants to do with the computer.  If you don't really have a desire to build your own, and aren't worried about it being very upgradeable, get a Dell.  If you want better componentry and more control and upgradeablility, build your own, although it will likely cost more, because as mentioned, Dell does appear to get some pretty big discounts from Intel and Microsoft.

Already have been recently discussed:
 
http://forumz.tomshardware.com/har [...] 88719.html
 
Basically for a budget system it's better to go with Dell, especially if you can get online coupon codes. In general, higher end systems will probably be cheaper to build than to buy.
 
Regardless if you are building a budget or expensive system, it's you who decide what parts goes into your PC. That is both good and bad depending on your budget. Plus you need to troubleshoot your own difficulties (more or less).
 
Check out the link; it should give you some ideas.

I agree with sleepdeprived82. That's sort of like asking what’s the value of a custom car and comparing it to a Ford Echo.
 
A big problem with cheapo name brand pcs is that you can't upgrade them. Not the one you specified but most have integrated video and no video card slot.    Many of them will have some oddball part that keeps you from upgrading the system. Budget systems are designed to last to the end of the warranty.
 
 
Also I just tried the system you spec'd on the Dell site it rang up as $1,019

 
Wow! A Ford Echo? Must be a new model! I thought it was Toyota Echo.