Just to give you a more varied answer... you don't nessessarily need an AMD64 chip for picture/video processing. A P4 should be more than enough for most picture/video stuff, especially if you don't plan on being a power user. Being an AMD fanboy myself, I would go the AMD64 route, but just so you know, its not something you "need" to do.
What you want is not nessessarily the biggest/baddest cpu you can get (though it does help quite a bit), but you want a good quantity/quality of ram. Having a good amount of ram definately helps when you're processing large video files (at least IME). I would suggest at least 512MB of ram. That should give your computer good flexibility for future use. If it means using the one cpu lower just so you can get the ram, I would go for it. Having a kick butt cpu with crappy ram would be counterproductive.
I personally build my own computers... but for the average user, getting it from a retailer is probably the better option. When my computer breaks down, I have no one to blame/turn to but myself. At least with a retailer, you can point a finger at them. Dell is a nice company to go with if you want to buy a computer from a retailer. IME, the sales people are very nice, and service is quite good. I bought my laptop from Dell and was very happy with the service that I got. My battery pack died prematurely, and Dell replaced it with no question... I actually got the pack two days after I placed my complaint. Very good for a mail order company.
Oh, just to so you know... the computer industry is constantly changing. Everything that is out now, will probably be obsolete sooner or later (usually sooner). The sales person wasn't lying when you were told that the P4 would be obsolete... but don't listen... or you'll be forever waiting for the "ultimate" system to come out. Just don't go all out and spend 4000 bucks on system... because in a few months, it'll be worth a lot less than you'd want it to be. I mean, heck... the ATX form factor is going to be replaced soon with another form factor (I believe its called BTX). Does that mean that ATX form factors won't work anymore? Absolutely not
-Richer