$1000 can get you a pretty nice gaming PC, the OS is going to be around $95 or so, with the monitor price varying. Toms Hardware is a good place to look around for build tutorials. http://www.tomshardware.com/theme-build-your-own,156.html
If count the monitor price into my rig then it cost well over $2000. Mostly because I'm using an HDTV instead of an actual monitor. However, I had this TV before I had the computer, so that may not count.
Anyway, for an OS you could probably try an OEM. You can only install it on one PC, but it's a lot cheaper.