For about $500 I bought a used desktop, new power supply, and an Radeon HD 7750. Plays all the modern games at acceptable frame rates with graphics levels superior to consoles. This desktop has the Core 2 Quad Q9650 which is rated on par with the Core i7-860, -920, -930, -940, -950 and Core i5-3220T, -750, -760, -2405S, -2400S with 8 GB RAM.... so just because it's not brand new doesn't mean it's a slouch. The HD 7750 isn't the fastest card but it's in the top 10.
My point is you don't have to go spend $1,000+ to get an acceptable gaming desktop. I've always built desktops this way on a comparably modest budget and it's worked out great. Hardware that was badass just a year or so ago is still fast enough for what most of us want to do.
If you wanna build your own I highly recommend http://www.pricewatch.com
. It's an online marketplace not associated to any one vendor or reseller. Can really help you just price out what you want with out going to 20 different sites. For exampl I quickly found:
$250 = i5 3570 CPU + MB which is at the top of CPU hierarchy.
$120 = Radeon HD 7770 which is in the top 5 for ATi in graphics card hierarchy.
$90 = DDR3-2000 8GB
$50 = SATA 750GB 7200RPM 32MB cache HDD
$50 = 800watt PSU
$40 = brushed aluminum Diablo Tek case
That's $600 for a base desktop that's considerably more powerful than the one I have.
* Shipping not included in prices.
** Assuming you are reusing monitor, keyboard, mouse, optical drives so I didn't price those.
*** CPU Hierarchy: http://www.tomshardware.com/reviews/gam ... 106-5.html
**** GPU Hierarchy: http://www.tomshardware.com/reviews/gam ... 107-7.html