Newegg had a combo special yesterday for less than $250 that included a quad core amd cpu with 4 gb of ddr3, case, hardrive, power supply, etc. Register for their email promos, and check their daily shellshocker deals. Where I live, you can sometimes get windows 7 unopened for around $50 on craigslist. People get extra copies and unload them all the time. I recommend the "pro" or ultimate version of 7. With the money saved, you can get a decent graphics card, such as the 450 femi or 5770. Both chipsets run pretty well and are within your budget if you get a combo deal.
Thanks bro! i just wish i knew more about what i was looking for.. /: