Everyone has some great advice, and pretty much answered most of your questions, so I'll add a little.
My bud just bought a dell with Vista, and he's having a b!tch of a time with hardware conflicts,(old keyboards, LAN cards etc..), and he's a pretty wise computer guy.
I pieced mine together, and I keep a 350 gig as my main hard drive, and a 300 gig for back up. Yes this is overkill, but I'm a huge fan of digital pics, so for an extra $40, I'd recommend the larger hard drive. It's good to have it, and not need it, than need it, and not have it down the road. You never know what youur future interests might be
Video card, yes don't cheap out. You'll apprecitae what it can do, even if you don't understand it
I've ran both Intel, and AMD for processors, and I would definitely recommend the AMD. It's reliability has made me a devout fan
Go with Win XP if you can. That would be the most inportant advice at this time, being that you may not be familiar with the conflicts that the Vista Operating System is still dealing with.
Good luck