If you are reading this, that's because you don't know what you need. Everybody wants a top of the line computer but that's not for everybody and cost too much for people. So here's a small guide to understand what each component does and what you might need.
Even though I prefer to build my own computer, I tell most people to buy from a chain store or an online company like HP, Sony, Compaq, Gateway, or Dell. If you make your own computer this will make you cringe, but these companies are able to sell computers for less that local shops and won't disappear if you computer breaks down the road. They also usually have a 1 year warranty on parts and you can call in for help.
When you buy a computer always, ALWAYS, check the warranty. If you don't plan of getting a new computer for a few years (and it pains me to say it) it may be helpful to get at least a 2 year warranty, because most of what will go wrong with a computer will happen in the first 2 years of your computer's life. This is because most companies buy parts that aren't tested and these parts can sometimes burn out in the first two years of the computer's life.
CPU
This is the brain of the computer. The most common processors are either Intel or AMD. Many budget computers use the lowest speed possible or a CPU with little internal cache or even CPUs that are an older generation. When choosing a CPU you need to know what you are going to be using the computer for. For simple non video-graphic intensive games, word processing, and basic internet surfing, any new computer will do. The more video intensive a person needs the better the CPU should be; however, the speed of the CPU doesn't impact the performance of a computer as much as the cache on the CPU.
Most CPUs have between 256k and 1 Mb of internal cache and the more internal cache the CPU has the better it will run though the processes. Some older CPUs (made by Intel) were budget and had no internal cache on the CPU and they ran slowly because using System memory id slower than using internal cache. Still most people will find that they will not need a CPU with a lot of internal cache.
Video Card
Next to the CPU the video card is one of the few components that affects the performance of the computer the most. Some people say that RAM is more important than the video card but some video cards actually share system memory (RAM). That is to say if you have 1024 Mb of ram and you have a card video card is 256Mb but uses Hyper memory (Hyper memory uses system memory) you might only have use of 896 Mb of ram.
Likewise, if you have 512 or system memory with a video card that uses hyper memory you may only have 384 Mb system memory. But if you have a video card that doesn't use system memory it will help the computer run faster. Some computer systems (mostly laptops) use a video card that is on the motherboard and don't have any ram of their own and locks up system memory. Still if you aren't going to be doing gaming or video editing, that should be fine, but you will notice a slow down of you computer from time to time.
System Memory (RAM)
Next in line mostly because it helps the computer run faster and in most cases having more ram will be better. With Vista it is advised to have 2 GB (But it will run with 512Mb) or ram or more but with Windows XP you could get away with 512 Mb of ram and it would be fine. But over all the more ram you can get the better you computer will run, especially if you choose to have a video card that has hyper memory or a video card that has no memory of its own. Depending of what OS you will be using the more RAM you will want.
Sound Card
This isn't really that important nearly all computers come with them and they are mostly aesthetic. Unless you are doing sound editing or video editing any sound card will work.
Hard drive
Although some people fell that the bigger the hard drive the better that's not necessarily the case. Most people can easily get away with a 40 GB Hard Drive if they aren't storing tones of music files, videos, or pics on the hard drive. But If you are an MP3 fanatic or want a ton of videos you will want a larger hard drive. If you are only going to be using it for work or typing the smaller hard drive will serve you fine.
Monitor
This is only to taste. Most places will try and sell you at least a 17” monitor and I think that's fine. 15” monitors are okay for text and simple video files while larger monitors will be better for high quality video and video/image editing.
OS (operating system)
I won't tell you want to get so try them out for yourself. Windows, Mac, or Linux. Whatever you find to be most comfortable, use.