Windows Vista may change the world but even they can't knock a well-equiped PC you can buy today. The requirements published to date suggest that you will require 512Mb of RAM, a Pentium 4 processor (CPU) and a reasonable graphics card (link), but these requirements are enhancements on what your base WindowsXP box would be. If you're considering your options for a home system to suit your needs for the next 5 years, plan on buying hardware that meets the needs of Vista but surpasses the minimum requirements.
My Recommended Base System for 2007:
Some of these requirements are high, now, but I expect the user experience to be improved and demands upon your system to increase greatly in the next 5 years and it's always good to have head-room rather than frustration with a slow system. You may also notice that there is a USB connected hard disk. This is for your safety and comes with this message, "BACK UP YOUR SYSTEM!" If not your OS, your data. These can be had for $150 (Canadian) and will save you much time and frustration. Combined with a tool like Acronis TrueImage you will find your peace of mind is well above the high-water mark of the Sea of Peril.
Pentium 4, 3GHz (preferrably with Dual-Core or Hyper-Threading).
1Gb of RAM
80Gb Hard Disk
80Gb USB External Hard Disk
4-6 USB Ports
Ethernet On-Board (100Mbit capable)
64-128Mb AGP Video Card
A UPS (Uninterruptable Power Supply)
You might be thinking, "You said a new system isn't required." You're right, and I am not suggesting that bleeding edge is required. My own home system is a P4 1.6GHz with 1Gb of RAM, 60 Gb Hard Disk. I have an external 60Gb USB hard disk. I have added a PCI USB 2.0 card (adding 4 external ports to my 4 existing standard ports) and use USB to connect my UPS, external hard disks, Pointing device(s), an extra serial port, my PDA (HP iPAQ), and a couple of USB Keys (2x512 and 1x128Mb). THIS IS EXTREME! My point is that this system is actually old, 3-4 years old and will handle Windows Vista reasonably.
There are systems with much more capacity than mine available from places like TigerDirect.ca, FactoryDirect.ca, or even the end-of-line systems at Best Buy. You can take home a system for $500 that will do, you can invest $1000 and not require an upgrade for 4 years. Get the warranty. Some people may cringe when I say this but, unless you're a techie, seriously consider a DELL with the extended warranty. They'll support you well and you will have few concerns about down-time for the duration of the warranty. When the warranty is up, start planning for the replacement.
BTW: When looking to get rid of of old hardware, talk to your local schools, churches, and volunteer organisations. They will appreciate being offered the hardware itself at no cost.