First of all; $1000 =/= awesome pc. You can put together something decent, but don't expect 60fps in Dalaran.

The Q6600 is still the best budget processor available. Easily overclocked to 3.0 or 3.2 ghz, you will get the more per dollar than anything else out there. The downside is the future. The i7's are taking over and bring a new socket design with them.

Assuming you have a monitor, but need a mouse/keyboard:
<<Broken Link /sigh>>
If you don't need the mouse or keyboard, take that $50 and get a CNPS9700LED so you can confidently overclock that processor to 3.0+