RAM prices have skyrocketed, so you might like to go with just 512MB initially, and then upgrade when the prices come down. Normally, 512MB DDR2 is about Rs.7000 (Kinsgton) these days. Hopefully the motherboard you find would have 4 DDR2 slots. I bought 512MB DDR2 667 Kingston with 3 years warranty about 2 weeks ago for Rs.7500.
Video cards that perform well are very difficult to find to go under your budget, because they are too much overpriced in Sri Lanka. You might be able to buy a nVidia 7300 for less that 10000 if you look properly. EPSI had them for 10000, so usually if PC House has them, they should cost a lot cheaper than that. No point going for a Geforce6 card (unless it is a 6600 card which might perform better than a 7300, but to tell you the truth, I haven't compared them head to head.
Don't buy a sound card. The latest onboard sound is better than Creative Live series. I don't think you are looking at Audigy cards, are you?
DVDRWs are about 5000 or even less these days. I recommend buying Liteon or maybe Sony. Why "maybe" is because they are actually Benq drives and very good ones (probably the best). But by default, the features of Benq drives are disabled in those Sony drives (scrambled by Sony's firmware). If you crossflash a Sony with a Benq firmware (not just flash - you have to crossflash and there are several guides out there how to do that. Just google it), you will get all the benefits of Benq drives, but will void warranty, unless you can switch back to Sony's firmware before returning it to the reseller.
Also, Benq have bought Liteon (or they have built an alliance) so newer Liteon drives are very good. Mitech have Liteon burners.
Latest hard drives are SATAII. Unity plaza has only Hitachi (with 2 year warranty) and Maxtor (with 1 year warranty). Hitachi drives are fast, but I went with Maxtor because they are superior to all the other drives when multitasking (multiple program launches at the same time etc.) 160GB should be less than Rs.8000 but not sure. Try not to buy a 2MB buffer version (if they are available at all). 160GB ones are usually equipped with 8MB cache (but my Samsung's has 2MB
). I don't think they have the Samsung SATA drives, but they might. Samsung drives are very, very reliable. So are the Seagate and Western Digital drives.
Try to get at least a 945 chipset motherboard. Since you are not going for SLI (because only the premium class motherboards have two PCI-E 16x clots), try to find one with onboard graphics. Because if for some reason your video card fails, you will still be able to work with your onboard video no? Asus motherboards are very reliable, but every maker gives 3 year warranty so don't worry much about it. Go with the best spec motherboard. Newer Gigabyte boards are reliable than the old ones (about 3 years ago). Don't buy Intel motherboards though. They suck! Might be OK if you don't play with the default settings, but try to avoid them. I couldn't because all the other motherboards for my Core 2 Duo was over Rs.22000 and without onboard video. I'm still on onboard video by the way.
CPU is the biggest problem. Best option is to go with dual core CPUs and you will see that they will perform better in the future when more and more programs are multi threaded. But usually a 3.4GHz P4 would be about the same price as a P-D 2.8GHz or 3GHz and P4 will perform better in games because games are single threaded (at least for the moment). However, since you are going with a cheap nvidia card, you will see no difference, so P-D 2.8GHz would be the best. If the price difference is not much, go with 3GHz one.
I recommend buying a separate Power Supply because the one that comes with cheaper cases will give you lots of trouble, including equipment failures. Spend some money on a power supply. When you buy one, ask for server power supplies. They cost a lot (about 5000), but worth the money, because you don't want your CPU to fail because of a crappy Power Supply Unit, right? When choosing one, check for the amperage on +12V rail (you can find it on the sticker with the table on the side of the power supply unit). You should look for one which has at least 18A on the 12V rail (or if there are two rails, combination should be 18A or more).
So to sum it all up,
CPU = Pentium D 2.8GHz or 3GHz
Motherboard = Intel 945G chipset motherboard. Gigabyte and MSI are cheaper than Asus
RAM = 512MB DDR2 533MHz Kinsgton and 3 year warranty (don't go with any other brand even if they are a lot cheaper. they will fail eventually) Not having dual channel doesn't really make a huge impact. They are more important for onboard graphics.
Video card = Geforce 7300 256MB (of possible, try to find the GT model because they are a lot faster - about 2.5 times faster than the basic)
Hard Drive = Hitachi 160GB SATAII 8MB Cache, 7200RPM (it will work even if your motherboard only has SATAI)
DVDRW = Liteon 16x - not sure which models are available though (don't buy those 18x drives. they are too new and not much known about them).
Audio = onboard
Speakers = ask GTRZ (if he hasn't replied already)
Monitor =- whatever you like. low end model are all the same.
Case = whatever you want
Power Supply = whatever that suits what I said. EPSI had ASUS power supply units and they should be fine. Go for at least 400W, because higher that value, less strain is on the Power Supply and it runs cooler too.
Keyboard/Mouse = whatever you want
Hope this help(s/ed) you.
Cheers,
Anusha
Sorry for delayed reply, my inet connection is was out of order. Anusha Thnx a lot for all the info, It was very helpful, coz lately i was not much aware of harware stuff. Yes as amila325 said I think Anusha's config will overlap my budget, Ill try my best. 
(Is data transfer rate) ?
)
it pisses me off to no end but they can't really tell the difference much less justify the price difference.
