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what do the internet sellers mean when they say -ASSEMBLED , INSTALLED UPDATED AND TUNED?
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Just a bunch of marketing hocus pocus for "building a computer"
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If I build my own system - how do I tune the system to where there will be less conflicts?
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If you mean hardware conflicts.... choose good parts (which we've taken the liberty of doing)....if you mean software conflicts .... the internet sellers wont do that regardless and you'll still have to do it on your own
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also would it be better to just do 512 RAM instead of 1G and put the money on the video card upgrade?
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Probably not. The 5900XT isnt a "bad" card by any means (nor is the 6600GT which would be a better route if you can wait till october for the AGP version) .. you'll find the 1GB in DualChannel a lot more useful.
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The system costed 800$, and I can run doom three almost on ULTRA, and no lag at all. Think about it
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Define "almost". Even when i swap a 6800GT into my system, running on Ultra is still a b!tch at high res. (PS how are you running Dual Channel when you're using three slots...which invariably disables dual channel

). But regardless the setup is good but certainly obsolete (especially so comapred to the setup we've spec'd as well as the nearest P4 setup)