I'm on the brink of buying a new computer, the ones I've got at the moment are alright but, are coming onto 6 years old so, its that time again. Ofcourse I'll wait till the january sales are on before buying anything but, I'm not the best at computer hardware and need some advice.

I've got a budget of at least £1000, but I can stretch it to £1500 if needs be, and I'm after the best of the best, and for reasons I cant explain I NEED to spend the entire amount (it cant be spent on anything besides computer bits).

I might be a bit mis-informed on computers, but I know that I should steer well clear of firms such as PC World and Comet. So I asked a bunch of friends and they said all sorts of words that sound fantastic but, mean very little... "Quad Core", "GeForce 9900", or something like that.

Anyways, I figure if I can get hold of all the parts seperately and build it up myself, I could create a very good system which, isnt designed for games or media... but designed for all of them combined. I searched online but, I honestly got lost and I dont know whats what. Any idea's?

Another question, do want to buy a new computer with a new monitor and mouse and keyboard and so on or just a computer, I mean the case and what you all can fit in there? 

As Andreas already said there're two processor manufacturer AMD and Intel and two graphic-processor manufacturer ATi and nVidia and it's a real matter of taste what you choose. Today they're motherboards on market which fit well with AMD-processors and ATi-Graphiccards, for example this one "Gigabyte GA-MA78G-DS3H RS780G" or with Intel-Processors and nVidia-Graphiccards. But they all work also crisscross.

I think a good way to start were to go to the next magazine trader and to buy a magazine about computer, there are nearly always some tests, comparements of the performance or the cost-performance ratio or recommendations - here is one of them
http://www.matbe.com/articles/lire/1121/comparatif-de-100-processeurs/page24.php

A french website tested 100 CPUs (central processing unit) in many programms and some games.
A tip: In games (jeux) like F.E.A.R. you need at least 30 FPS (frames per second) for a "fluid cycle" but you should know that here they only test CPUs, in many games, but not all, the graphiccard is crucial for this "fluid cycle".

Don't know what to say next because there is so much to say... 

Well, Empe has beat me to it, and i can wholeheartly agree with every word he wrote. Follow his advice

From my point, but i'm biased, a PC with handpicked hardware and home assembled will be always "dearer" to you than a premade build, and would give you more customization about what you want to do, not to mention that doing that, you can choose all quality components and there's not the risk of getting a 90% good PC with that 10% crappy hardware that brings it all down.
This, though has a big cost in money, and time (time before for choosing the components and time after for fine-tuning them, testing and fixing little glithes that may occur). The first you can cut down by knowing beforehand what do you ant to do with the PC. Of course, if you want an hardcore gamer machine, prepare to dish out big money on a regular basis just to stay up to date, but with a minimal advice from friends and some "coolheadedness" in the choice can spare you lots of dindin.
As for the time, i'm sure we can help you choose what it's best for you, and maybe even the places hwere to get them (maybe someone that makes assembling so you wont have to risk it, the first time building a pc is bound to have something screwed up ).

So, my suggestion is don't go for the premade builds that cost 500E... spend a little more but pick what you put into your pc.

Even with Windows XP, its worth gettign as much memory as posible, I run 3gb in this PC at the moment and it runs likea dream.

You can get 3gb of Ok quality memory (3x 1gb) for about £45-£50 nowadays, memory is really cheap.

When choosing a motherboard avoid any board with less than 3 memory slots. Try and get a full size ATX board as you will have far more upgrade paths and also the components will be less cramped aiding better airflow, you do now want to box your graphics card in, it needs good cooling, and a PCI/PCI Express card next to it can cause it to get too hot, a common problem with commercial PCS which primarily use MicroATX. SLI is a good option to have as you can buy 2 identical graphics cards with a SLi Bridge and "combine" them to spread the laod. These can be used with a single card with excellent results however.

ATX
http://www.computerbox.hu/shop/images/msi%20K9A2%20CF-F.jpg

MicroATX
http://img.alibaba.com/photo/100312033/HP_Micro_ATX_Motherboard_5188_5465.jpg

I have used a number of different motheboards over the years. I have had the best luck with Abit, Asus, Epox and DFI Lanparty. My best board was the DFI Lanparty board, you pay a little bit more but its worth the investment.

Stay away from PC Chips, ECS (Elitegroup), Asrock and unless on a budget, MSI (Microstar). ECS and asrock boards are poor beyond belief, a lot of computer manufacturers use them because they are cheap as hell. I have may instability and compatibility issues with them both. Asrock generally tend to be cheaply manufacturered and MSI again dont often offer much in the way of options.

IMHO you have to be very skilled in this to assemble your own computer from scratch. People who earn doing that, at least assembled many computers in their life, they know common schemes, common incompatibility problems etc. If I would buy by PC from scratch, it would be much more possible that something would just refuse to work... I'm a programmer, not hardware builder so if you're not a professional in that area, like Marco or Empe, I would advise to rely on some knowing guy's opinion.

From a technical point of view, assembling a PC is not very hard, the main problem is the ability to find the errors that you might have made afterwards. If you follow a few general rules and read some installation guides, keep your eyes open and double-check the positions of the cables and such, it should be an easy task. I basically learned everything on my own as well, and rarely had any help from someone who was physically with me. But if you know someone who can lend you a hand, I don't see why you shouldn't try to assemble your PC yourself.

Carl is right that a Micro-ATX board tends to be rather cramped, but if you can get one that doesn't lack essential features, such as a PCI-Express slot for the graphics card, or enough RAM (memory) slots, you can get one that is very cost-efficient. You're lucky that you can spend quite a bit of money from an "external" budget, so this can be invested in quality components indeed. BTW, "ATX" is a form factor of the mainboard, which basically sets some standards of the layout and such, so you can be sure it fits in your case etc. Micro-ATX boards are smaller than the regular ones, have less expansion card slots etc., but technically, they are essentially the same.

I don't have any experience with those DFI boards, but ASUS has never disappointed me so far, so you might take an ASUS board under consideration as well. 3 GB RAM sound very nice for a Windows XP system, however this might prevent the use of "Dual Channel" RAM access, which basically means that the computer can access two memory modules at the same time, which is obviously faster. For a better system performance, you can also buy two identical hard drives and set them up as a RAID-0 system, so the data is being accessed and distributed over two HDs, which should give you a notable performance boost when working with large files (videos and such in particular). It goes without saying that the data security is not improved, so make sure to buy an external HD as well where you can make backups on a regular base.

I browsed my favorite online shop and came up with a sample configuration, which might help you to make a decision:

Case: Arctic Cooling Silentium T1 ECO 80 Midi 550W ATX - 85 €
CPU: AMD Phenom X4 9850 AM2+ Black Edition - 155 €
CPU fan: Arctic Cooling Freezer Xtreme - 25 €
Mainboard: ASUS M3N-HT Deluxe Mempipe 780a SLI AM2+ - 155 €
RAM: OCZ 4096MB KIT PC2-8500U Fatal1ty CL7 - 75 €
VGA: ASUS EN9800GTX+ DK TOP/HTDI/512M 512MB - 200 €
HD: Western Digital Caviar Black 500GB SATA II - 2x 65 €
DVD burner: LG Electronics GH22NS40 SATA - 30 €
Card reader: RaidSonic Icy Box IB-861-B - 25 €
Keyboard: Cherry G80-3000 - 50 €
Mouse: Logitech G5 Laser Mouse - 40 €
OS: MS Windows XP Professional SB 64Bit - 130 €
22" TFT: LG Electronics L227WTP, 22" TFT, DVI/VGA - 240 €
external HD: TrekStor DataStation maxi g.u 500GB USB - 60 €

The sum of this configuration is 1400 €, which is about £1180. Without the screen and the external HD, the price is about £925. I'd consider this a state-of-the-art machine that should be able to run virtually every software that is around. Obviously, I cannot guarantee that this configuration works perfectly, and I haven't read any reviews, but from the name and price range alone, they are surely better than anything that you can get in a pre-built system. I don't know from experience if the 64 Bit version of Windows XP would cause any problems (driver-related and such), but you can use more than some 3 GB RAM with it, so it might be an advantage.

Well, at least some of the items on my list are personal preferences, of course, the case and mainboard brand in particular. I don't know much about graphics cards, but I think it is wise to choose an nVidia card if you have an nVidia chipset, and an ATI card might go better with an AMD chipset. If you decide to buy an Intel CPU, you obviously need another mainboard. The Western Digital HDs were chosen because of the noise level as well, but Seagate might be as silent as well these days. The RaidSonic card reader is pretty cool, since it also has four USB ports, a FireWire port, and DC outlets for external devices, such as USB HDs (saves you a separate power supply that clutters your desk). I bought that one for our astronomy club PC, since there are always several people who bring USB sticks, flash cards and such with their new photos and whatnot - quite often, all four USB ports are full during our meetings.