With a Windows license, it's closer to $560.
Here's a build:
Case $100 seems like any decent case costs $100.
Mobo Gigabyte GA-H61MA-D3V uATX $55
CPU Pentium G620 2.6GHz $64
Cooler Scythe Big Shuriken 2 Rev B/etc… $50
RAM Samsung 2x2GB $24
SSD Samsung 830/Crucial M4 128GB $105
PSU Seasonic SSR-360GP 360W gold $60
OS Windows Home Premium 64-bit OEM $100
I haven't paid attention to tiny cases. Don't have a recommendation. The gigabyte mobo has SATA 6GB and USB 3. The G620 is as low as I'd go for a CPU. Seems like all the decent coolers are in the $50 range. Big Shuriken for low skyline, Mugen 3 perhaps if have room...have to look at mobo clearance... I like the Samsung RAM. 128GB SSDs are in the $100 range now. I like these two. Don't know if you need a HDD. Hey, Seasonic has a $60 80+ Gold PSU now.
Like I said, someone will come up with a list quick -- thanks Steve, esp. the news about Seasonic's 360W gold.
I beg to differ re the case & CPU, tho -- a Fractal Core 1000 case is around $30, and good enough. Biggerr than "bookcasee" but fairly small, and way quieter. And any dualcore Celeron Sandy/Ivy Bridge like G540 (2.5GHz, 65W) or G530 (2 GHz but just 35W) will handle 98% of office tasks w/o issue -- there's little performance difference between them and low end Pentiums but they can be had for as low as ~$40.
I also think the low cost cooler champ Coolermaster 212 would probably be good enough, esp w/undervolted -- they can be had for as low as $30.
Take those savings into account and you're well under $500 even if you do choose to pay the microsoft tax.