Maybe you _can_ build a Celeron 2.6GHz CPU; 256Mb DDR; 160Gb HDD; NIC; DVD-ROM; 17" Monitor; and Windows XP Pro PC for under £350. But you've got to go to the effort of sourcing the components, putting the thing together, and troubleshooting it if something doesn't work properly. Plus that price includes a 3 year NBD onsite support warranty too.
I know this is a low spec BTW, however for 80% of small office environments that we come across it is perfectly adequate.
IMHO building your own PC these days is just not worth the time and trouble unless you want something that's not available off the shelf.