I think the e7200 is a better choice than the e8400, cos it's $50 cheaper (at least in australia), and can overclock just as well, and $50 is just not worth it for the sake of a tiny boost from the increased cache. Performance wise, it's MUCH wiser to spend that extra cash on the video card when you're building a gaming computer, as the gpu is far more important than cpu in this case. You should be able to get 4GHz+ easily with either cpu.
Otherwise that's a decent system he's suggested for you. (I'd say wait ~2 weeks and see what ATi launches, and what impact that has on prices of existing cards before purchasing a video card).