Intel Duo Core E6300 (about £130), but if I were you I'd spend about £200 on the E6600, which has 4mb L2 Cache (not 2, which is still pretty nice). But for the price range, the E6300 is easily the best.
If you have to go AMD, you can get an X2 4200 for the same price, but you would forever be mocked!
yeah agree with all the above post. go with core 2 duo e6300, it's the most value budget cpu to get.
i have used e6300 and e6600 and for general application you can't tell the difference. of course the e6600 would go faster but for the price, e6300 looks pretty interesting. in average e6300 would be only left around 20-25% behind than the athlon fx-62, so it's a very very very good cpu for the money.
C2D e6300 is pretty popular right now for the $. If you go with AMD the x2 4200 (about same price at C2D e6300) is pretty good and can be overclocked to about 3 gig with stock cooling. You have more motherboard options currently with AMD, so you can have more options if you like. The C2D has less motherboard options, but either way you want to go would be good. Intel has the newest technology out, so that is more popular rights, so it's up to you. GL with your build or purchase.
I've never seen X2 4200 at 3GHz on stock cooler. Actually I've seen few OC-ed at around 3GHz & stable, but using water cooling and at over 1.55V. The C2D are much more overclockable than the K8 CPUs, so it is so much better choice for overclockers.
There are better and more options for mainboards with the s939 than with the sAM2. And there are more mainboard options for C2D than there are for K8 on sAM2.
Anyway, the C2D systems are performing faster than the K8 systems at the same price point.