Here is what I'm thinking of getting. I'm also wondering if it will be cheaper next month due to the release of Penryn, Nvidia's 9 series, and the 790i motherboard.

Intel Pentium E2160 Allendale 1.8GHz LGA 775 65W Dual-Core Processor Model BX80557E2160
I thought of getting this because of it's good overclocking potential. I plan on replacing it with something better a couple of years from now.

EVGA 122-CK-NF67-T1 LGA 775 NVIDIA nForce 680i LT SLI ATX Intel Motherboard
I thought this would be good because it can handle sli and quad core

CORSAIR XMS2 2GB (2 x 1GB) 240-Pin DDR2 SDRAM DDR2 800 (PC2 6400) Dual Channel Kit Desktop Memory Model TWIN2X2048-6400C4

OCZ GameXStream OCZ700GXSSLI ATX12V 700W Power Supply
My only concern is do I need this much power?


EVGA 320-P2-N811-AR GeForce 8800GTS 320MB 320-bit GDDR3 PCI Express x16 HDCP Ready SLI Supported Video Card
Is the 8800gt worth $50 more?

Western Digital Caviar SE16 WD2500KS 250GB 7200 RPM SATA 3.0Gb/s Hard Drive

XION Onyx XON-301 Black Steel ATX Mid Tower Computer Case with Stylish LED Power switch and unique 140mm Green LED Fan

SAMSUNG 20X DVD±R DVD Burner with LightScribe Black SATA Model SH-S203N

I'm going to use the Windows XP I have now. The total come to $735 as of now. Will it get cheaper next month with all the new stuff coming out?

get an ATI 3850 or 70, these cards are better than 8800 gts 320 mb.

Or the 8800 GT 512mb video card over the 8800 GTS 320mb.

Regarding your question about the PSU, do you plan to go SLI? SLI is generally not recommended but I see you chose an SLI mobo. It SLI, then the PSU is about the right size. If no SLI is anticipated, then you could cut back to 500w unless you plan to add a fair number of other components later.

I would go with a P35/X38 motherboard.
700W is necessary if you are planning on SLI.

I do not think you will see much if any price reductions, maybe a little on CPU's. Ram is about as cheap as it can get, as long as the demand for p35 motherboards remains high, and it will, don't look for prices to drop, an ocassional sale maybe but that's about it.