For the same price you can get the 4850 GPU. It'll smash the 8800GT and even the 9800GTX. Different motherboard if you plan on going with dual GPU's, especially dual ATI cards. Look for something with the X48 chipset. I'm likely about to order the Asus P5E Deluxe. For a single GPU solution, just find a different motherboard with a single PCIe x16 slot, should be the same price.
Get the E8400 instead of the E6850. If you are looking for quad cores, get the Q6600. If budget performance is more your type, get the E7200. The 4850 does perform better than the 8800GT. Get a P45 motherboard or go for a X38 motherboard.
It would cost 524$ without psu. With psu it would be 623$ and you would get mail in rebates for psu and GPU. You can tke more time than me and look everything in details but in 10 minutes this is what i can gather to improve yout build. Good luck!
EDIT: If you dont need power supply take the e8400 processor!
yeah go with the e7200, ati 4850, and i would try to get a cf motherboard in case you want to add a second card in the future.
get the 8400 if you plan on encoding and stuff like that because the extra cache help. but for gaming 7200 great and it will oc great
for power supply i would go for ultra you would have to get one at tiger because they don't sell them at newegg. every budget system i built (5) i used ultra power supply's all never paid more then $60 and each of them are working great haven't had one failed, and they are all covered under a lifetime warranty. or maybe im just a lucky one
just look at reviews on parts and do your homework and you'll have a great system