2. What are some good computer sites that are either Canadian or ship to Canada?
I think newegg.com should ship to Canada (not sure though). They have an excellent selection and good prices in general (and excellent customer service). It's usually possible to find individual parts for slightly cheaper on miscellaneous other sites, but when you factor in what you'd pay in shipping to buy from 4 different retailers to get the absolute lowest price per-part instead of just buying everything from newegg, newegg.com almost always wins (not to mention he extra headaches associated with buying from several different sources..."I have the CPU, RAM and MB, but my case won't be here until next week and I have no idea where my video card is").
3. What hardware do you recommend? I would like to get the best computer possible for my money.
For general recommendations, I'd say for the CPU go with a Venice based, socket 939 Athlon64 3000+ or 3200+. This chips are inexpensive (< $150) and will both overclock into the 2.5 to 2.7 GHz range with the stock HSF, and have the added benefit that you'll be able to upgrade to a dual-core setup in the future without changing out the mainboard. You'll probably want an nforce4/nforce4 Ultra based motherboard to accompany it, though steer clear of the SLI variants, as SLI just plain isn't worth it. MSI, Gigabyte, Asus, and DFI all make nforce4-based boards that offer a wide array of features and overclock very well. Don't skimp when it comes to RAM, since you'll be overclocking the CPU you'll want either some decent DDR400 RAM rated at CL2, or some name-brand DDR500 RAM. 1 GB (2x512 MB) is a good amount of RAM to buy. If you opt for the DFI board, don't settle for anything other than the OCZ "VX" series of RAM so that you can take advantage of the additional voltage that the board offers. Similarly, don't bother getting "VX" RAM if you go with one of the other boards, as they don't offer high enough voltage settings for you to really take advantage of it. Another place to not skimp is on the PSU. You don't need to buy an 850W monster, but you should definately get a well-reviewed, name brand PSU. Since you are building a new system, you might as well get an ATX2.0 compliant one (or whatever they're called when that have the 24-pin connectors). Expect to spend between $60 and $100 (U.S. dollars) on a decent PSU that will last you through a few upgrade cycles. For the graphics card, the 6600 GT offers very good price/performance, though if you are a hardcore gamer and have some extra cash, the prices for the 6800 and even 7800 models are actually getting reasonable (especially if you look on ebay). Also worth considering is ATI's 800 XL card. Any of these cards should offer very good gaming performance. For HDD's you have a wide range of options. Just go with whichever 7200 RPM SATA drive(s) that support Native Command Queuing that appeal(s) to you. If you have some extra cash and like extra-speedy load-times, there's nothing wrong with the Western Digital Raptor II. The case is pretty much up to you, get whichever one you like, although you might want to look for one with nice features like sliding drive rails (makes installing HDD's/optical drives easier) and mounting locations for 120 mm case fans (helps keep the overclocked CPU cool). Finally, don't bother with a third-party cooler (unless you want phase-change cooling, then by all means get a Vapochill). Instead get a tube of Arctic Silver 5 and use the HSF that ships with the CPU. Replace the thermal pad on the HSF with the Arctic Silver 5 (use a razor blade to get most of it off, and then acetone/denatured alcohol to remove the residue it leaves). Be sure to round the system out with a generic floppy drive, whichever DVD/CD burner you prefer, a "free" copy of Win XP Pro, and a recycled monitor from your previous system (or a new flat panel if you have no previous system).
It should be possible to build a system out of the components mentioned above for $1000 to maybe $1500 (again, U.S. dollars) at the most if you opt for the high-end versions of everything, and when overclocked it will perform better than most systems currently out there.