Core 2 Duo's are old. Careful what you pursue. Chances are a Sandy Bridge Pentium (like a G620 even) will be just as good and cheaper, while still being upgradeable to ivy bridge. Do you already have a motherboard though?
For the GPU, I suggest a Radeon 5670 or 6670 w/ GDDR5. It's not very powerful, but it's the best you'll get that can run on a weak PSU.
What PSU do you have? That's kinda a big deal before you decide on graphics.
Once you include Windows, you'll often find that OEMs like HP or Dell actually sell cheap ($200-$300) models that are cheaper than you can build (unless you find AMAZING sales).