Processor
The CPU (central processing unit) is the brains of the computer. The performance of the processor, which is measured in gigahertz (GHz) now, determines how quickly the computer responds to the requirements placed on it and the higher the number, the faster the processor.

The two major players in the CPU market are Intel and AMD. While each has individual strengths and weaknesses, both companies offer processors with comparable levels of performance. Here's a breakdown of their offerings:
     
  Entry Level - AMD Duron and Intel Celeron
    These chips are designed for inexpensive computers and are best suited for office applications (word processing, accounting), Internet access and light multimedia tasks (viewing video, digital photography, etc.). While you see PC's powered by these chips with the same speed rating as more expensive processors, they are missing a few features that are found in their pricier cousins. The most important of these is the size of the cache. Cache is where the processor stores frequently accessed instructions or data for faster performance. For example, the latest Celerons are equipped with 128K/256K of L2 cache while an Intel Prescott processor has a whopping 1MB.
     
  Mid Level - AMD Athlon XP (266/333/400 MHz bus) and Intel Pentium 4 supporting Hyper-Threading Technology ready (533/800 MHz)
    These chips provide a solid mix of power and affordability. They do a good job of handling more processor intensive tasks like audio/video editing and 3D imaging as well as speeding up the rest of your computing tasks.
     
  Top Of The Line - AMD Athlon 64/64FX (800/1000 MHz bus) and Intel Prescott processor (800/1066MHz)
    These are the fastest processors available. They're best suited for those who put a premium on multimedia performance and power-hungry applications like computer aided design.
     
While it might be tempting to buy a PC with a 3.4 GHz Pentium 4 instead of a 2.4 GHz, it's not necessarily the most economical decision. The newest processor to hit the market usually does not have enough of a performance improvement over its predecessor to justify its high price. You can find a better deal by buying a couple of speeds below the leading edge – it really depends on how much budget you have.
     
    Still want to learn more about the processors?
    AMD Website
    Intel Website
     
Monitors
There are two types of monitors available for PC's: the traditional CRT and the newer LCD. The CRT (cathode ray tube) is used for both televisions and computers. It produces a good quality image at a number of different settings for a reasonable price. LCD (liquid crystal display) monitors, also known as flat panel displays, are used in notebook computers and more frequently for desktops as well. They are lighter and smaller (only inches thick) than a CRT with reduced electromagnetic emissions and power consumption. Due to their proven performance and lower cost, CRT's remain the more popular option among home users, but corporate users are changing to flat panel technologies rapidly.

If you're on a budget, consider putting your money toward a good monitor rather than a fancy graphics card. After all, you'll be looking at the screen whenever you're using the computer, so it pays to get one you'll be happy with. A large, good-quality monitor can well last long enough to use with your next new computer. In our book, a 17-inch monitor (measured diagonally) is a minimum, and a 19-inch model is definitely preferable if you can afford it. Larger 21-inch monitors are more of a luxury but may be justified for graphics-intensive work and power users; likewise, flat-panel LCD displays offer brilliant images and occupy minimal desktop space, but they're substantially more expensive than traditional CRT monitors.
     
RAM
If the CPU is the brains of the computer, RAM (random access memory) is the muscle. It is the place where the operating system, programs and data in current use are kept, ready to be accessed by the processor. The more RAM you have, the quicker and more powerful your computer is.

If you're faced with a choice between buying a faster processor without much memory, and buying a slightly slower processor with more memory you should take the memory. Having extra RAM will provide a much bigger boost to system performance than a few extra MHz of CPU speed.

While Microsoft's consumer operating system, Windows XP, has a stated requirement of 256MB of RAM you will find the user experience slow and prone to crashes. Any new computer you're considering should have a minimum of 512MB but preferably more. If you like to run multiple large applications then 1GB is worth having.
     
Hard Drive
While RAM stores information for a limited period of time for instant access to the processor, the hard drive is the place where data is stored on a more permanent basis. All software, from operating systems to word processors, has grown tremendously in size over the last few years. Media files such as MP3 and digital photos are big and require a lot of disk space. This has led to a corresponding need for high capacity hard drives where all this data can be kept. Hard drives in new systems range from 60GB to 300GB in size.

If you are buying a computer for the whole family, you're going to want to go for the biggest hard drive you can afford. All those MP3 and video files that people like to download can quickly fill a smaller hard drive. The less need you have to accommodate large media files and games, the safer you can feel going with a smaller hard drive. For typical office use, 60 to 100GB is plenty of storage.