Sounds like you have reasoned things out pretty well. I have to disagree about AMD systems being a nightmare though. What is so different about assembling an AMD system? Both AMD systems and Intel systems are put together in a similar fashion. I have built both including a Duron system last night on the KT7 RAID. Easy as hell if you ask me. My bro's P3 system was more of a pain in the ass. Worst thing about setting up the duron system was that the floppy was bad, so that delayed us. Still this had nothing to do with it being AMD. It runs at 1gig and super fast...for a $70 CPU. About all this hype about putting on the heat sink wrong...that pisses me off. I did it in 30 seconds...looked at it to make sure it was all good...and it runs under 100F now. No problems at all. I'm not dissing Intel systems here, like I said I have built those too, but I don't like the BS that gets spread about building AMD systems. If you use onboard video and sound though, you will be saving money. So the cost of those Intel parts will be offset.
I recently built an AMD based system and while I like the TBird chip I think the VIA chipset is a piece of junk. Unfortunately at this point there are not really any other options for a TBird, so I'd recommend a PIII solution. The Intel price cuts take away nearly all the price difference between the systems and in my experience (only built one TBird system 'tho) the Intel systems are easier to set up and far more stable.