WinAmp is definitely the way to go. It and the MP3+G plugin are both free. The only software you should have to spend money on is a good book printing program. I use Song List Creator 2 by Latshaw Systems. It's $49 but it makes beautiful books.
Spend your extra bucks on a some subwoofers and a crossover. Man, what a difference that makes!
I will say, if you're going to go PC based, don't go with a laptop unless you can get one that's capable of dual screen mode so your lyrics display can go to a separate screen. Also, keep in mind that laptops are quite fragile for the bar scene. I used to use one until a drunk fell into it and fried it with his drink. Now I've got a sturdy rack mounted PC with a heavy duty (waterproof) flat panel monitor. I found a keyboard that lights up all the keys for dark rooms on newegg.com.
Oops, I started talking hardware on a software thread....my bad