Gary,
This is a somewhat disputed subject. Some people claim that having the PC in a case allows for better airflow across the CPU and motherboard due to fan placement. I have always maintained that regardless of airflow across the various components, the airflow in and out of the cabinet should be of greater concern. Even with a good fan and proper placement, there's no sense blowing hot air around inside the cabinet and across your MB.
The amount of circulation you will need depends on several things. PC monitors usually run pretty hot, as do AMD's XP processors. Setup, component selection and ambient temperature (i.e. do you have A/C in the summer months?) are a few factors that you will have to consider. Different solutions work for different people. Some cabinets I have seen do fine with only an exhaust hole cut fairly high at the back or top of the cabinet. Others I have seen incorporate various configurations of 80mm PC case fans mounted in the back panel of the cabinet itself. There are yet others that use 120v Radio Shack fans.
As a general rule, I would say that you could start of with the minimum that you think is necessary. Say, an exhaust hole or one fan. Run good system monitoring software on the PC and see how it does temperature-wise. If it runs too hot, you could add a fan or two to increase circulation in and out of the cabinet or to direct air directly across the MB.
Another item of concern to some is that having the PC inside the cabinet with no case offers no RF shielding. I have never encountered a problem with this so I cannot comment. Good luck!