I've had a lively email exchange with reader Bob Magallon about a new PC he'd like to purchase. The catch? He'd like to spend as little as humanly possible.

Great deals abound on PC hardware, and every vendor from Dell to HP to brands you've never heard of has a great deal on an ultra-cheap PC.

So how cheap is too cheap? Bob and I went e-shopping, looking over a $299 Dell that seemed too good to pass up. In the end, it probably was. Here's the advice I passed on to Bob over where he should consider spending a bit extra to upgrade and where he could stick with entry-level parts.

• RAM. This is the most important area to consider an upgrade. At $300, you're probably getting 256MB of RAM, not enough to run more than one application at a time efficiently. Upgrading to 512MB is only about $40. Go for 1GB if you can afford it.
• Hard Drive. Bob's hard drive was 80GB, plenty if he doesn't want to store lots of video on the machine. Hard drives come in 250GB and even 500GB models now, and upgrades are fairly cheap.
• CPU. $300 usually means a Celeron chip, a watered-down version of the Pentium. It's slower and less capable, but for basic use it's fine. If you're crunching big spreadsheets, running database applications, or even some games, you'll want to upgrade to a Pentium or AMD Athlon CPU, though this will add $200 or more to the price. (Remember that you don't need the very fastest CPU, even if you upgrade.)
• Video Card. With a bare bones system, you don't get a low-end video card, you get no video card at all. Many low-end systems have no PCI Express slot for upgrading to better video, even, so if you want to play any game more advanced than Minesweeper, you'll need to upgrade the whole machine.
• Optical Drive. The $300 PC usually comes with a CD-RW drive, which is nice, but a dual-layer DVD+/-RW drive is a welcome addition and only runs about $50 more. With the DVD, you'll be able to store about 10 times the data on a single disc, which makes it much better for backing up and other storage needs.
• Other Considerations. Vendors love to add on monitors, and for as little as $20 you can get one with the machine. Be careful, though, these are rarely top-shelf displays. Also: Expect few extras, like memory card readers. Finally, be warned: Those big discounts usually require rebate forms to be filled out. If you don't like paperwork, you're out of luck.

Got a specific system you want checked out before you buy? Send me the specs or a link in email and I'll give you my opinion.