Okay here it goes. This will give you plenty of power for now and give you good GPU power for the $.
OPTION #1
CPU - $170 One of the better CPU's in this price range. You could go for a e8400 for about $70 more, but than if your going to spend that much $, I'd consider the q6600 instead.
Intel Core 2 Duo E6550 Conroe 2.33GHz 4M shared L2 Cache LGA 775 65W Dual-Core Processor - Retail
http://www.newegg.com/Product/Product.aspx?Item=N82E168...
Mobo - $98 - $30 MIR = $68!! One of the best budget p35 mobo's out there.
ABIT IP35-E LGA 775 Intel P35 ATX Intel Motherboard - Retail
http://www.newegg.com/Product/Prod [...] 6813127031
GPU - $187 - $15 MIR = $157!! Solid performer and decently priced. Has 512mb memory and is close to 8800gt/3870 speeds. Hard to beat at this price and has a 90 "Step Up" program, so you can upgrade to the latest GPU's and only pay the difference (if you want to). Also has Limited lifetime warranty!!
EVGA 512-P3-N862-AR Superclocked GeForce 9600GT Superclocked 512MB 256-bit GDDR3 PCI Express 2.0 x16 HDCP Ready SLI Supported Video Card - Retail
http://www.newegg.com/Product/Product.aspx?Item=N82E168...
PSU - $85 - $20 MIR = $65!! Best PSU at this price range. Has plenty of connectors and has a 5 yr. warranty to boot!! Also has 41A on the 12V rail so you won't have to worry about which GPU you install.
Corsair VX 550W ATX Power Supply - CMPSU-550VX
http://www.buy.com/prod/corsair-vx-550w-atx-power-suppl...
Memory - $65 - $35 MIR = $30!! Can't beat the price and speed of these modules. 800mHz DDR2 at CAS 4 is some of the best you can get at this price range.
Crucial Ballistix 2GB (2 x 1GB) 240-Pin DDR2 SDRAM DDR2 800 (PC2 6400) Dual Channel Kit Desktop Memory - Retail
http://www.newegg.com/Product/Product.aspx?Item=N82E168...
HD - $100!! You'll enjoy the extra space. If you need more, just buy more now or just buy another HD later.
Western Digital Caviar SE16 WD5000AAKS 500GB 7200 RPM 16MB Cache SATA 3.0Gb/s Hard Drive - OEM
http://www.newegg.com/Product/Prod [...] 6822136073
DVD Burner - $29 shipped!! This is the retail version, so you can view/burn DVD's, because the software is included!
PHILIPS 2-Tone 20X DVD+R 8X DVD+RW 8X DVD+R DL 20X DVD-R 6X DVD-RW 12X DVD-RAM 16X DVD-ROM 48X CD-R 24X CD-RW 48X CD-ROM 2MB Cache SATA 20X DVD±R DVD Burner - Retail
http://www.newegg.com/Product/Prod [...] 6827248008
Case - $57 shipped! One of the better budget cases out there. Currently there aren't any really good steals, so this is what I found. I'd go for a Antec 900 or Cooler Master 690 case, if they were on sale. They usually are around $60-70 when they are on sale, so consider those when they hit the sales rack!
COOLER MASTER CAC-T05-UB Centurion 5 Mid Tower Case (Blue) Retail
http://www.zipzoomfly.com/jsp/Prod [...] ode=141783
OPTION #2
Subsitute the CPU and mobo with these, if you want to go with AMD. Keep the rest of the build the same as above.
CPU - $98 shipped! One of the best x2's that AMD has for the $! Just add the CPU HSF to it.
AMD Athlon 64 X2 5000+ Brisbane 2.6GHz 2 x 512KB L2 Cache Socket AM2 65W Dual-Core Black Edition Processor - Retail
http://www.newegg.com/Product/Product.aspx?Item=N82E168...
CPU HSF - $27 shipped! One of the best budget HSF's for AMD processors. Will allow you cool and stable temps even if you do mild OC's with it, which I would go up to 3 gHz w/a couple of clicks in the BIOS!
ARCTIC COOLING Freezer 64 Pro 92mm CPU Cooler - Retail
http://www.newegg.com/Product/Product.aspx?Item=N82E168...
Mobo - $105 shipped! Same one you selected.
GIGABYTE GA-MA770-DS3 AM2+/AM2 AMD 770 ATX All Solid Capacitor AMD Motherboard - Retail
http://www.newegg.com/Product/Product.aspx?Item=N82E168...
INTEL BUILD
Total ~$791 - $100 MIR's = $691!!! Not bad for under $800. You can obviously find better deals if you go hunting for them, but these are from reputable online vendors, so take that into consideration. Newegg seems to have the best customer service, but doesn't always have a good price on things, so shop around before you purchase.
AMD BUILD
Total ~$752 - $70 MIR's = $682!! Now the 5000+ BE is pretty close to the e6550 in performance, but is also cheaper, so you can decide which way to go. If you want to eventually go with Phenom, than this would probably be the way to go.
Finally, I'd take the the $ left over and get a nice 19-20" LCD. I'm haven't researched any LCD's recently, so someone else can guide you better than me. You'll have about $215 to spend on a LCD, so that should cover that part quite well. Also forgot to add an OS, which should cost about $100 or so. I'm not yet ready for Vista, so I'm currently sticking with XP Pro. You can decide which OS best suits your needs.