The short answer-
1) Asus M2NPV-VM motherboard (Use the onboard graphics- set it to 128 MB. Update the firmware to 0707.) ($60)
2) Dual core AMD processor
3) 512 MB for a client, 1GB for a core/ Hybrid
4) A generic Realtek for a second NIC if you need it.
5) 160 GB HDD is around $80 or less 500 GB can be had for around $100
6) Case big enough for all of this.
You will also need the accessories to make it useful like USBUIRT, IR remote or Gyro Remote etc.
The above hardware will work, its all well tested.