I think I spent $700 or so on my computer when I built it, but that included the price of a monitor as big as my fucking desk at the time, so $500 is probably doable. And I've just now gotten to the point where it's starting to need some minor upgrades, so it can last you a pretty good while.
Like Monsoon said, Newegg is pretty much the place to go. I get damn near everything for my computer from that place.
I'm no expert on using a computer for graphic design, but I think
they share something in common with gaming PCs: you need a ton of memory. So a motherboard that supports a good bit of memory is a must. Something along the lines of this
, perhaps. Then a processor to go with it. Then the RAM itself. Then the power supply and case. Then any hard drives and optical drives you want. And that's how you build a computer.
...I hope I didn't skip something important. It's late. :P