Anandtech has a good article about creating a mid-range system, which is what near your budget. My personal preference is lean towards the Amd system, but this is my preference. Both system come about $1500 and do gaming well.
http://www.anandtech.com/guides/showdoc.aspx?i=2535
AMD Specs from article
AMD Mid-Range Gaming System
Hardware Component Price
(Processor) Athlon 64 3000+ Venice 512K 1.80GHz (939) - Retail $146
(Motherboard) DFI LanParty UT SLI-DR $165
(Memory) Patriot PC-3200 2x512MB Extreme Performance XBL $150
(Video Card) XFX 7800 GT Overclocked $379
(Hard Drive) Western Digital SATA II 160GB 7200RPM 8MB Caviar SE $81
(Optical Drive) BenQ DW1640 Black (OEM) $43
(Case) Cooler Master Cavalier 3 CAV-T03-UK $76
(Power Supply) SunBeam 550W NUUO SUNNU550-US-BK Modular PSU $86
(Display) Acer AL1914smd-8 19 inch 8ms LCD $301
(Speakers) Labtec ARENA 685 5.1 Speakers $48
(Keyboard and Mouse) Logitech Internet Pro Desktop $23
Bottom Line $1498