OC is like running a MM on a revo - Provided you know what you are doing and take care - No harm done.
For $500 you are better off getting a door buster and going with XP. Don't expect to do much gaming with it.
My best tip is to look here for the desktops:
http://www.tomshardware.com/2007/09/...w_cost_system/
http://www.tomshardware.com/2007/09/..._2007_edition/
Drop me a PM - this kind of stuff is my job...