System Drive: SEAGATE 40GB 7200RPM IDE Model ST340014A, (OEM) = $58
Video Drive: SEAGATE 160GB 7200RPM SATA Model ST3160023AS, (OEM) $131
OS: MICROSOFT "Windows XP Professional" (OEM) = $137
Here's my 2 cents following VideoGuys lead on what components should go into a $1000 machine.
Went with the Cooler Master case for construction, aluminum cooling factor and appeal. Went with Antec True 430W power supply for build quality, quietness, and combined rail output. Went with the Abit motherboard for price, chipset, gigabit LAN, firewire, SATA RAID, etc. Went with Matrox P650 for dual monitor (upgradeable to 3 monitors). Went with Intel Pentium 4 because it performs better for tasks like encoding etc. Went with Kingston Hyper-X for quality and price point. Went with Seagate drives for sheer build quality and performance.
If I had more money I would add DVD-R/RW. Another 160GIG Seagate SATA drive to configure RAID setup (for backup protection).
Alternative options would be to switch the Abit board for an MSI and /or swap the Intel Processor for an AMD 64.
Could obviously keep going if given more money, but for around $1000 this system would be very nice. Oh, and I'd used Vegas as my NLE of choice.