Note that prices are in Australian Dollars and specs are as at 11 May 2011. I've ignored netbooks even though I personally find them cool. I've also mostly ignored non-windows platforms because as I said, these people aren't adventurous. Finally, where I've mentioned brands it doesn't particularly mean that they have my overall endorsement or condemnation. It's just my experience with them - and the "vibe" I get from other people who use them.
Throughout this document, you need to be thinking about the use to which you intend to put your computer. Is it just an office machine? Is it only for the internet and word processing, spreadsheets etc or will you want to run specialised software on it, like MYOB. Will you be running games? If you have kids, how long do you expect your computer to last and will you eventually give it to them for games?
There are three main systems for computers; Windows, Mac and Linux.
You don't need to buy a Windows computer. The other types will run office applications and the internet just as easily. It's mainly a matter of choice.
If your computer will be used for games other than simple ones like solitaire and Angry birds, then you probably need to go Windows. Games run well on the other systems but there's much less choice.
Mac and Linux computers are safer than Windows ones but nothing is 100% safe and they'll still need protection (anti-virus, firewalls etc). Don't let any vendors tell you that it isn't needed.
If you choose an alternative system to windows, you'll still be able to run windows on that device too. Macs and Linux PCs can "dual boot" allowing you to choose which system you want to run and both can also run virtual machines (ie: a Windows PC in a window).
Macs are generally well known for their speed and ease of use while Linux computers are known for their speed and security.
Windows XP is no longer being sold, so you can't buy that. It's immediate successor Vista should not even be considered. Windows 7 is much better. It's important though to make sure that you get 64 bit windows 7, not 32 bit. The 32 bit windows 7 will only use between 2 and 4 GB of memory regardless of how much is installed in your system so you'd have to convert someday. It's better to start off converted.
HP is arguably the best brand of PC at the moment with Sony being the best notebook brand.
Other good brands include Dell, Lenovo and Toshiba (notebooks only).
Acer and Asus are lesser brands but still good.
Most computers these days are built by the lowest bidder in a single factory. The main differences are in the casing and the brand label. Internally, they're all quite similar.
While you can go for a no-name brand, this will reduce your costs but increase risk. It's not recommended.
Desktop Computers typically cost between $700 and $2,000. You should not pay outside this range. Notebook Computers are always more expensive and typically range from about $1,000 to $3,000
The current intel processors are expressed in terms of Core I series.
As a general rule, the I7 is more powerful than the I5 but actually any of the I-Series processors is fast enough for all but the heaviest CAD/Design and video editing usage.
So long as you get an I Series, you'll be ok.
Most computers these days are being sold with about 2GB of Memory. This is not nearly enough. You should consider 4, 6 or 8 GB of memory. Memory is installed in "slots". If you're going to stay with 2 or 4 GB, you should talk to the computer salesperson to find out if there will be spare slots. If there are no spare slots then you'll have to throw the old memory out and buy all new memory once you decide to upgrade.
Since smaller amounts of memory are often cheaper, you may find that a PC with four slots and 4 GB of RAM uses 4 x 1 GB sticks. This means that you're at your limit. If you later decide to upgrade to 8GB, you have to throw all your memory out and buy 4 x 2GB chips. On the other hand, if your system was originally populated to 4GB using 2 x 2GB sticks, then you've got two slots free and you just need to buy an additional 2 x 2GB sticks when you're ready to upgrade.
Most computers these days are shipping with about 160 GB of hard drive space. For most users, this is ample though Gamers and video editors may want a little more. 160 GB should store all of your documents and music without any trouble.
If you're planning to store a lot of video there (ie: saving your whole DVD collection on hard drive), then you'll probably want to consider more. It's not a great idea though because you'll still have to back it up. Instead, consider getting a couple of 2 Terrabyte USB hard drives ($120 each). You can back all of your data up to them. Note that I said TWO - that's because you'll want one for "real" and one as your backup.
While I'm on this point, you'll need to learn how to disconnect your USB drives. It's not just a matter of pulling out the stick. If you keep doing that, you'll eventually corrupt the data on the drive.
All computers these days should ship with a gigabit network card. This should be sufficient. You might also want a wireless card added particularly if you're using a notebook. I haven't seen a wireless card in a recent computer which doesn't comply with standards so any new card should be ok.
The sound cards which ship with modern computers should be perfectly adequate unless you're planning to use your computer to replace your entertainment system. In that case, you'll probably want to check for DTS and Dolby Digital 6.1 sound.
This is the biggest trap in new computers today!
If your computer isn't going to be used for gaming or design then the video card that it ships with is fine. If you're a gamer however, you'll need to get a decent graphics card.
It doesn't end there though because although you can easily replace most of the other components in your computer, the video card usually needs a dedicated slot. You'll find that many computers including the big brands like Dell will skimp on the slot if they don't have to supply a card.
If you're planning to add a game card later, make sure that you inspect the computer's motherboard to ensure that there is a slot available for you. Get the salesperson to help. These days, the slot is called a PCIe slot.
At the minimum, you'll want a "DVD Burner" DVD-RW, DVD+R etc. This ensures that your computer is capable of reading and writing DVDs and CDs. You might want to pay extra to get blu-ray capabilities particularly if you like watching movies on your computer. If you've got spare money, a Blu-Ray writer may come in handy.
Most of the other slots on your computer are pretty much the same from one computer to the next but you'll want to check that you have enough USB slots and that they support USB 3.0.
You should have about 4 USB slots in the back of your computer two in the front. That's the minimum. More is even better. Don't make it a deciding factor though because so long as you've met the minimum, you can easily add more via a little gadget worth about $10.
If you've got a digital camera, you might want to check to see if the computer has slots for these cards (Usually SD, MicrosSD, XD or CompactFlash). It doesn't matter if it doesn't though because an external USB card reader will set you back about $15.
You should also make sure that your computer comes with both a DVI and a VGA video slot. You'll want the DVI slot for higher quality video. Having both also allows you to have two monitors connected if you want.
Bluetooth - this is a good thing to have on a notebook but it's not essential unless you already have a bluetooth device you want to connect.
Aside from Windows, you shouldn't rush out and get software unless you actually need it. Bundles are good but make sure that they're entirely bundled and not just trialware. Microsoft Office and Anti-Virus packages will often ship as trial software and they will stop working after a few months unless you pay money.
The free Microsoft Windows Defender is as good as any anti-virus software on the market today. I know, I've tested it and it found viruses that McAfee missed (on several occasions). Don't be tempted to have Windows Defender AND a commercial anti-virus package on your computer. It won't make it any more secure and it will slow it down.
Microsoft Office isn't free but there are some very good alternative systems which are not only free but also compatible with Microsoft Office. In some cases, they're better (Libre office includes a really good drawing package). They're all easy to use and it's recommended that you check them out before spending money on software you don't need.
Libre Office (Previously Open Office) (http://www.libreoffice.org/download/ )
IBM Lotus Symphony (http://symphony.lotus.com/ )
Most desktop PCs come with a one-year warranty but a lot of Vendors like Harvey Norman and Dick Smith will offer to extend these for a price. It's usually worth doing but a PC which survives the first year will generally survive for much longer. Check the warranty to see if they'll come out and fix the computer (on-site) or if you have to send it away.
Notebook computers are a different story. You should get the longest warranty possible because these computers are more prone to failure (due to their rougher handling).
Some other Alternatives
Finally, if all you want is the internet, you might want to investigate some other options. Netbook PCs are under $500, Old PCs can be converted to fast internet-only PCs by installing GoogleOS or Ubuntu Linux and then there's the plethora of tablet devices like the iPad and Android. If you're willing to wait until mid-June, Google will have their new PC and operating system out by then.
Best of luck shopping for your new computer.