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ur going to want to invest as much as you can of that in a good video card and CPU.
If you plan on building it yourself, you should use newegg.com and read the extensive reviews posted by the consumers. even if you don't plan on building it yourself, go to newegg and look @ the cpus and video cards and sort by best rating and do some reading to determine whats the best bang for your buck - this will give you a sense of what you want. there are about 8-9 pieces of hardware you need to build your own: cpu, video card, motherboard, ram, hard drive, case, power supply, cd drive - try to ballpark the cost of each piece on newegg. with your budget, you should be able to build a reasonably good gaming rig. I also strongly suggest you buy a power supply larger than what you will need (750W should be plenty for a rig with a single video card + lots of room to upgrade)
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