The Matrox Parhelia wins hands down for 2D photo editing, especially when used with an aperture-grill 21" monitor, Sony, Philips "P" series or Mitsubishi Diamdtrons (or other CRTS that use Mitsibishi tubes, though check for quality electronic components that allow for 100HZ plus refresh rates) Even better, the Matrox dual-head capabilities allow you to edit the photos on one screen and have all your tool pallettes on a second screen (which can be any old 17"+ el cheapo).
Nobody beats Matrox for 2D sharpness or colour depth. For the ocassional 3d game for the kids, maybe a MOBO with inbuilt 3d engine will be enough, failing that, buy them an Xbox or something.
Oh yeah, at least 2gig of ram is essential too.