DDR2 or DDR3?

what processor are you getting? Intel Core 2 or Core i7. At your budget I'll assume your getting a core 2 in which case the answer is no. Also If your thinking of getting DDR3 for a future upgrade then don't bother either. By the time you upgrade from core 2, core i7 will likely see newer revisions allowing it to use ddr3 rated higher then 1.6v.

If your building core i7 then your only choice is DDR3

DDR3 will eventually outpace DDR2, yes, but you're looking at spending a lot more on DDR3 and added price does not justify the extra performance -- most benchmarks you'll find out there show maybe a 2-3% difference at best -- unless you're using this for memory intensive software or trying to save energy (DDR3 uses less power than DDR2).

If this machine is just for gaming, video editing, image editing, etc. more gigabytes of DDR2 RAM will yield you better results than less gigabytes of DDR3.

By the time you get around to upgrading again, i7 will be the new standard and you will have to upgrade your MOBO anyway to support it.
Remember that i7 is a package: if you get an i7 you have to get an x58 MOBO and DDR3 memory. So if your not getting an i7 for this build, its pointless to spend twice as much to get DDR3 memory.