No doubt that you can do it for under $1000!
Maybe you'd feel safer getting a BAREBONE system and putting in the other parts yourself, CD, operating system, and hard drives are pretty easy to install. http://www.googlegear.com
has some good ones, you could even try to customize it, bu I guess that'd cost more. I think they have a P4 2.4 Ghz barebone system for around $500. Still kinda high but has onboard sound sound and LAN. The 4200 can be had for $130 retail and is not that hard to put in, Spend $20 at Bestbuy or whatever on a decent keyboard.
But, keep in mind, you'd save some money if you do it all yourself. All retail parts will come with a manual explaining everything. There are also a lot of good on-line guides. I'll post some later if needed.
EIDT: Also, look into http://www.abspc.com