There may be some sites with $500 complete pcs w/flat panel monitors, but I haven't seen any. The few sites I've checked out have incomplete systems for around $200-$300, that you just add your OS, a monitor, and whatever else it may be missing or need upgraded.
For example, walmart.com has some microtel systems that include 40gb hd, 128-256mb ram, probably integrated audio and video, keyboard, mouse. Some include cd-rom, floppy, modem, ethernet, others don't. None include OS. They run somewhere around $300-$330, and then a cheap 15" lcd flat panel monitor would be around $149... the only thing left would be the OS (linux = free, xp = $99, OS you already have = free). I don't know any thing about microtel computers though.
So, maybe the best bet would be to either get a used/like new system somewhere else (EBAY, Local computer store, classifieds, friends) cheaper, or to save up another $200 and get a somewhat better system, which includes both an OS and flat panel monitor.
You could also probably build a pc for around that price. Get like a sub-2ghz amd xp cpu/motherboard combo, that has integrated video, sound, and ethernet (if you need broadband) for around $100, a case/power supply/mouse/keyboard combo for around $35 or so shipped, a 40-60gb hd for around $20-$30, cd/dvd-rom = $20-$30, win xp $99, and flat panel monitor 15" for around $149. That totals around $450-$470.