CPU: Intel Celeron G540 2.5GHz Dual-Core Processor ($43.93 @ DirectCanada)
Motherboard: ASRock H61M-VS Micro ATX LGA1155 Motherboard ($49.99 @ Canada Computers)
Memory: Mushkin Silverline 4GB (1 x 4GB) DDR3-1333 Memory ($19.99 @ Newegg Canada)
Hard Drive: Hitachi 500GB 3.5" 7200RPM Internal Hard Drive ($59.88 @ Canada Computers)
Video Card: Gigabyte Radeon HD 6670 1GB Video Card ($47.62 @ DirectCanada)
Case: Cooler Master Elite 330 ATX Mid Tower Case ($29.99 @ Memory Express)
Power Supply: Antec 400W ATX12V / EPS12V Power Supply ($38.88 @ Canada Computers)
Optical Drive: LG GH24NS70 OEM DVD/CD Writer ($17.99 @ Newegg Canada)
Operating System: Microsoft Windows 7 Home Premium SP1 (64-bit) ($105.92 @ TigerDirect Canada)
(Prices include shipping and discounts when available.)
I have allowed $75 for PC assembly/testing and ground shipping. 13% HST not included. If you have any spare budget, upgrade the Celeron G to a Pentium G and maybe another 4GB in memory...there are only 2 memory slots on this mobo. Not a lot of excess capacity in a 400 watt PS. This is an alternate PS, 550 watt OCZ ZS550W for the same $38.88 price. Both are Seasonic.
At 1280x1024, using HD 6670 DDR3, Diablo 3 averages almost 60 fps in highest details, AA enabled.
Would need to replace the graphics card and the 250 watt power supply. $40 for the OCZ 550 watt (see above). $50 after MIR for the Gigabyte HD 6670 (see above)...you may even be able to upgrade to a faster video card...HD 7750 ($80 after MIR at Memory Express).
HD 6670 may work with the existing 250 watt PS...it's iffy at best due to the lower quality of the PS (99% of these refurbs have poor PS). One of my refurb HP's has a 300 watt Bestec PS...suspect brand for sure.
google search indicates people have been successful running discrete video card with their dells without needing to switch powersupplies-especially if you pick a more efficient video card like the 7750 mentioned above. ymmv.
I didn't really research too much, but that may be the best way on this budget, even though personally I would find this computer sucky (for my picky high-end tastes).
That being said, using the extra money for a nice new bigger monitor will probably bring you more joy to the OP, over spending that money on the actual computer "bits".
One option is to buy those CPU/mobo/etc bundles at Tigerdirect.ca I have seen a few AMD based "kits" for $299 or so....and add whatever is needed for a complete budget system....this is especially a good deal when on sale and if one is handy.