My assumption here is that you are using this machine for "general business" (word processessing, e-mail, basic web surfing). I'll assume you are running Windows XP Professional.
Processor You can not buy too little processor right now on a new computer. Whatever the cheapest thing out there is will be very fast. Do not be afraid of "Celeron" or AMD processors, they can get you a lot of work done for a lot less money.
Memory At this time, I'd recommend 512M RAM. Many systems are selling with 256M and a few are selling with 128M. The 128M systems are mostly unusable, you WILL need to upgrade them for all but the most basic applications (none of which would normally be called "business" applications. 256M is probably usable for basic users, those that keep one app running at a time. 512M allows you to keep many applications in RAM simultaneously, and flip between them quickly and easily. Granted: many people never run more than one app. These people may do fine with 256M.
Disk: Most business users will never fill an 8G hard disk. The smallest available now are typically over 40G. Sometimes, a slightly larger disk is slightly faster, but an "extreme" sized disk is usually slower. Even if a 120G drive is only a few dollars more than a 40G, odds are you will NEVER USE THE ADDITIONAL SPACE and the extra capacity can make some tasks more difficult. (A client of mine needed about 10G of server space (about three times what they were using up to that time). I suggested a 40G drive. They bought 80G drives, "They were only $20 more!". Well, their system now takes over 12 hours to remirror. This was NOT a good investment.)
Video: Whatever the CHEAPEST thing you can get is. The only typical reason for an upgrade is if you want a multi-monitor configuration (which is not a bad idea). Many modern machines have on-board video with "shared" memory -- these have earned a bad name for performance, but on modern systems, are VERY sufficient for business uses. These systems do, however, take their video RAM from the main system memory, and sometimes, excessive amounts. I've seen 128M machines ship with the video set to take 32M of RAM -- Windows XP ran a lot better when reducing the video RAM usage down to 8M. Some of these "shared memory" machines will use even more RAM by default, I'd highly recommend reducing this to near-minimum for most business use.
Audio: Most business uses do not need anything more than the most basic audio. A couple features to look for: internal speaker (rather than using external speakers -- sound quality is definitely inferior, but takes up a lot less desk space, and front-mounted speaker/headphone jacks, so you can easily attach headphones or external speakers if desired. External speakers are often not hooked up to office computers, for good reason -- do you really want an office of 20+ computers chiming, beeping and all the other odd noises Windows systems make?
Monitor: For a conventional CRT, 17" should be considered "starting" size. Modern CRT monitors are much smaller than older ones -- you can often put a 19" monitor on a desk in the same space as a few year old 17". However, today, you are most likely going to get an LCD monitor, prices come down substantially since I first wrote this. I do not believe they are going to have a particularly good life span. For LCD monitors, 17" monitors are pretty good for most people's use. 15" LCDs are almost gone now, but they do have their place, and they will typically serve a user as well as a 17" CRT. Note: some people will prefer the old-style CRTs, which will probably remain available for quite some time yet.
Removable Media: CD-RW drives are basically mandatory these days. Most businesses do not (yet) have need for DVD players on the desktop, though their price point is getting low enough, don't avoid them. Floppies are almost useless -- unless you have reason, don't pay extra for a floppy drive. You do NOT want your employees saving data on these things. Yes, I just said "Don't worry about floppies, use CD-Recordables". Zip disks are history, and a sad history at that. If you use them in your business, STOP. One Zip disk: 100M or 250M, $10 each, readable ONLY with another ZIP drive. One CDR: 650M, $0.25, readable on almost every computer today. Plus, CDRs seem to be much more reliable than Zip drives and media. Another removable media to consider for shuttling data around are the new "flash drives", which provide 128M to 1G or more of easily portable storage. However, you will want front-mounted USB ports, and hopefully, ones designed with a bit of intelligence (I've seen at least one computer which had a "pretty" plastic shroud around the front USB port -- rendering it impossible plug a Flash Drive plugged into it). Note: Flash devices are best used on Windows 2000 and later, while they can be used on Windows 98, you will have to load some drivers, and it can be a pain.
All-in-one systems: These are computers with a monitor built in, or sometimes viewed as a "monitor with a built-in computer". Typically these are LCD monitors. In some cases, this makes sense, but in general, these should be avoided. They make sense in "high-visibility" (such as reception desks) or cramped spaces, however they are expensive, use many custom parts, and when the PII-300 that seemed so fast when you bought it now seems like an embarrassment, you will not be able to reuse the monitor on a new computer. However, they do look cool and take up very little desk space, and reduce the number of wires on the desk, so if that is a consideration, give them serious thought.
Optical mice: Winner. Definite winner. Get one. Oh, did I mention I like optical mice?
Curiously, there is not as much difference between optical mice that there is in mechanical mice. I've used $6 optical mice that I'm very happy with. If money is not a consideration, I'm somewhat partial to the Logitech opticals, just feel good. There were some early Mitsumi optical mice which were pretty bad, but for the most part, the optical sensor is pretty much the same device for most makers of the things. Logitech made an "iFeel" mouse which would click as you rolled over clickable objects -- waste of money, in my opinion, I didn't find it at all helpful (I think they've discontinued it). One word of warning, though: they draw more power than mechanical mice, they *may* impact laptop battery life, though I'm not sure it is noticeable.
Wireless mice: The old Logitech wireless mouse was very good -- it would run for a year or more on one set of batteries, and otherwise worked well (as one would expect from Logitech). I've been getting mixed messages from clients on the new optical these: they love 'em until they start changing batteries. The newest generation of optical wireless mice seem to be vastly superior to the first few releases...battery life may be well over a month now, which brings a new set of problems: you will be less likely to be keeping a stock of the batteries on hand.
I've been using a "no battery" wireless mouse recently -- it has a special, dedicated pad which inductively transfers power to the mouse from the computer's USB port. I'm pretty happy with it, but there are some issues -- the power draw from the USB port is very large, near the spec limit of the USB port, so it may not work on many devices, such as laptops, unpowered USB hubs, etc. And, of course, you have to have the pad.
Wireless keyboards: NO WAY. This is a "What Were They Thinking" product. Even though your wireless keyboard may only work a few feet away from your computer, it is trivial to make a large antenna which could pull signals from a much larger distance. These things are easy to set up, which means there is basically no security -- and yes, there are stories of people plugging in a wireless keyboard, calling up a word processor, and watching what their neighbors next door are typing...everything: words, usernames, passwords, etc.
There may be some very specialized uses for wireless keyboards, but I have to consider them unacceptable for almost any business or home use.
Update: a few manufacturers are starting to do some simple encryption of the wireless keyboards. This will eliminate the effortless sniffing of keyboard traffic, but how much effort needs to go into sniffing traffic now is uncertain. I'm going to guess, based on the obvious amount of computing power on both the keyboard and the receiver (not much) that the encryption level is not robust. For this reason, I still will not recommend any use of wireless keyboards, but I no longer have a hissy-fit when I see one in use.
Fancy keyboards and mice: (extra buttons) I really do not recommend these. I've had bad experiences with removing one mouse and replacing it with another brand and having the drivers conflict horribly, and having a nightmare cleaning it up on Windows 2000. Simple is better. Really.
Printers: They all suck. Wish I had something better to say. Some of the high-end lasers are ok, but across the board, most printer manufacturers have switched from making their money on the printer to making their money on the supplies. Color lasers and inkjets are the worst with this. Your best bet: don't toss your LaserJet 4.
Getting Ready for Windows Vista: Vista has some absolutely absurd "requirements". I would, however, recommend totally ignoring Vista for any computer you purchase today. As always, buy what you need today. By the time you need to run Vista, you will be needing a new computer. Keep in mind, most of what Vista does is run the same applications Windows XP (or Windows 2000!) does now. There is very little benefit to upgrading your existing system to Vista, and there will be many risks in doing so (just ask anyone who upgraded 3.1 to 95, 95 to 98, NT to 2000, or 2000 to XP. Do you REALLY think it will go smoothly this time?). The computer you buy today should be left on Windows XP. If you wish to run Vista, you can buy a new machine then.
btw: It appears the biggest absurdity with Vista is the demands for
a cutting-edge video card.
It appears this isn't as horrible as it sounds -- it seems
that you may be able to get a user interface comparable to exiting XP
or 2000 on any business-grade video card (i.e., anything made in the
last several years, including on-board video).
Apparently, the extra demands is just for some special effects that
most people will find totally pointless, and may even disable.
What is odd is that these effects have been implemented in the Unix
and Macintosh worlds for years without needing gamer-grade video
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