I heard that there is really no difference between the two, except that the e6600 has 4MB cache, but i also heard that the 4MB makes very little difference, so what would/did you choose? (keep in mind i might buy one of these for gaming and $700-1000 budget for complete computer)

I would just go with the e6500 since you are on a budget.  Put the money saved into a better video card.  There shouldn't be much of a difference in gaming between the 2.  Whatever video card you buy will be the difference.

well right now the E6600, since the E6500 isnt out yet... and a complete build with either of those procs might be kind of difficult for $1000, im guessing nearly impossible for $700, since the E6600 is $315 right now. i would just go with a E6400 and OC the life out of it, the 4mb cache doesnt make much of difference in real life, about a 10% performance increase in certain tasks (gaming not one of them) at most.

You probably wanted to say E6400 or E6600.
 
Just take a look at the CPU charts on Tom's, see how they do in games.
But unless you have a very powerful video card, you won't see a differece.
 
For budget build go with the E6300. It's powerful enough.

Get the E6400, it should be fast enough for any games. With a decent DDR2 533 rams you might be able to overclock it a bit and depending on the rest of your setup.

A $1,000 budget for a "complete" gaming rig is possible though a bit tight.  
 
However, if you need to include a monitor then you'll find that it is nearly impossible without significant sacrifices.
 
Here's a thread I created for a $1,000 PC without a monitor. It was updated on 11/1/2006:
 
$1,000 PC Template
 
 
Here's a Value Gaming Guide from Sharkyextreme.com (but it's from Sept 2006):
 
http://www.sharkyextreme.com/guide [...] hp/3633106

I think i should rephrase what i wrote, what im doing is building a gaming pc, a really good one...for now, i plan on buying a cheap set of Ram to hold me until i can buy atleast 2gb ddr2 (hopefully 800mhz) and im also buying the NVIDIA nForce 680i SLI ATX so overclocking is definitely an option, other than the fact i havent really overclocked a system before, and yes i meant 6400.  and i probably buy a nice case for good cooling check this one out at newegg NZXT Zero Black/Silver Computer Case
 
thx. again.

btw jaguarskx : great find!

Don't know if you feel like overclocking, but you can do it on the E6400 without changing the cooler, making it faster than the E6600:
 
http://www.tomshardware.com/2006/10/10/cheap_thrills/
 
Bruce