It's a good hard drive. The entire 7200.9 family is fine and used by millions of people. There's a new one out there, called 7200.10, but it's not that much better. The CPU will be fine too.
Are you sure 160 GB is enough? Personally I'm looking at 500 GB drives, a CAD$ 132 Seagate 500 GB is good value for the money IMO. Depends on what you do with the PC, of course. You most likely don't have a TV tuner card filling up the disk every week.