New Build, $600 budget

I've been asked by a friend to put together a $600-ish machine for his family. They want to do some editing of Mini-DV footage, so they need 1394/firewire, and he's got elementary-school aged kids, who'll want to do whatever such kids want to do. Not a gaming system, though, and no OC to start with. His wife's freaked out by Vista, so I'll build it with XP or XP/64. They'd like a little expandability (though they're realistic, for this price) which is why I went with this MB.

Here's what I'm thinking:

MB: BIOSTAR TForce TP45D2-A7 LGA 775 Intel P45 ATX Intel Motherboard
CPU: Intel Core 2 Duo E7200 Wolfdale 2.53GHz LGA 775 65W Dual-Core Processor Model BX80571E7200
RAM: OCZ Platinum 2GB (2 x 1GB) 240-Pin DDR2 SDRAM DDR2 1066 (PC2 8500) Dual Channel Kit Desktop Memory Model OCZ2N10662GK
GPU: POWERCOLOR AX3650 512MD3-P Radeon HD 3650 512MB 128-bit GDDR3 PCI Express 2.0 x16 HDCP Ready CrossFire Supported Video Card
CASE/PSU: COOLER MASTER RC-690-KKA1-GP Black SECC/ ABS ATX Mid Tower Computer Case Real Power Pro 550W Power Supply
HDD: Western Digital Caviar GP WD5000AACS 500GB 5400 to 7200 RPM SATA 3.0Gb/s Hard Drive
DVD: ASUS 20X DVD±R DVD Burner with LightScribe Black SATA Model DRW-2014L1T
1394: Rosewill 2+1 Port Firewire/1394a Low-Profile PCI Card (Cable Bundle) Model RC-501 - Retail

This setup comes in just south of $600 at Newegg. Any price/performance mistakes I've made here?

The PSU can't be trusted.

You can usually get an Antec Sonata case for around 100 bucks that comes with a decent EA500W PSU.

Also, you do not need 1066Mhz memory. You actually only need 667Mhz, but generally the 800Mhz are the best deals.

As mentioned, that PSU isn't great, but may be sufficient for this build. Still, one of the alternatives provided by aevm would be a better choice. I also agree on the HD4670.
For no-muss, no-fuss, get DDR2-800 RAM that will run at the JEDEC standard 1.8V. This Mushkin is $56 after MIR: http://www.newegg.com/Product/Prod [...] 820146692.
For the optical drive, get a Retail version which will include the software, including the decoder that the family will need in order to watch movies.
http://www.newegg.com/Product/Prod [...] 6827106264, or http://www.newegg.com/Product/Prod [...] 6827106265 if you want Lightscribe.

Apevia PSUs are nasty. I owned an Apevia case (X-QPACK2) and although the design was great, the execution and quality control were so bad I ended up junking it as well (its included PSU had gone straight into the grabbage without ever tasting A/C).

I've built a couple of systems on the X-Dreamer II and I never really had a problem. I chose the X-Dreamer for my build rather than the X-Dreamer II since the glowing front face, while cool, was a little distracting for me. Unfortunatly the X-Dreamer is more difficult to work with than the X-Dreamer II, hence from now on I'll just disconnect the blue front LEDs of an X-Dreamer II if they say they don't like the glowing front ^_^. The PSU in the X-Dreamer II is also a little better than the X-Dreamer, but I don't mind since I swapped it out for my Fortron and put that PSU in my old Athlon 3000+ build