Lets see.
Atlon XP+'s are cheaper the P4s, and work almost as well. I don't know where AMD will be in the next year but I don't there should be any problem even if they are gone.
Hardrive: You say you don't need much space. 30-40 GB should be more than enough to to put your games in and your "images".

. I have one PC in my house (P3, 900mhz, 40GB HD) and there is still is 10 GB on it. There are tons of games and programs on it. 30-40 GB should be enough for you.
I assume you want a new pc to play games on. Need a decent video card. The way I see it is that (I read this somewhere) that PC software (games) requirements double about every 2 years maybe more. Lets just take FPSs since the are the most demanding games. The most demanding games out these days are Battlifield 1942 and Unreal Tournament 2003. These are the semi-next generation games. There not quite there but they will entertain us until the next gen. games come out late next year. (Doom 3, Quake 4, Half-Life 2, Unreal 2 etc.). A bit older than the semi-gens are the games like Medal of Honor and Return to Castle Wolfenstein. Not nearly as demanding. Going back a bit further to games released around '98,'99,'00 we have the really popular games like Counter Strike, Quake 3 and Unreal Tournament. Any PC in this world can run these older, really popular games. MOH needs a machine with about 550 mhz, 128 ram, and 16mb video card as the bare mininum. Unreal 2k3 needs something like 800mhz, 128-180 mb, 16mb video card to run it. The next gen games will probably need something like 1ghz, 256 ram, and 32 mb video as the requirements. Games coming out in later in 2004, 2005 will probably need something like 1.6-1.8 ghz, 512 ram, 64-128 mb video card requirements.
Note those are the bare requirements. If you want to have the game at a higher video qualtiy and it to go faster you need something a bit faster. For the semi. gen games like Ureal 2k3 something like 1 ghz, 64 mb video card and 256 ram will run it well. If you want it at its best then its going to cost tons more.
If you want a PC that will hold through for a while get something with 1.8-2.0 ghz, 40 GB HD, 256 ram (you can easily upgrade later) and a Geforce 4 MX 64mb video card (its the same as Geforce 2 but both can run any current game well and should be able to handle the next gen. games ok). You can always upgrade that later.
Athlon XP+ 1800 (which is like 1.6ghz, I think) and over
256 SDRAM/ DDRAM (DD is a bit better)
40 GB HD, try to get one with 7200 RPM. Just faster. Not needed
32-64 mb video card. With a 32 mb you can run all current game, some will be at lower quality. Still ok. Don't get intergrated video!!! You can GeForce 2 or ATI Ultra Rage 32 MB video card pretty cheap.