advice needed - optimum system

1199 seems high for a system with a 9600GT video card. You can pick those up for 99 to 130 bucks each.

I would look elsewhere to price out a system build.

To answer some of your questions, you can get the E8400 or a Q6600 for gaming. Both will do fine. The E8400 will clock higher than the Q6600 but I believe the Q6600 will be a better performer down the road when more and more apps and games become multithreaded.

It not a necessary upgrade to two cards if you pick a good video card to begin with. The 9600GT is a good card but there are more powerful cards out there for similar money.

I would go with an ATI 4870 or an Nvidia 260. Those will last you a while as a single card...
 
I say upgrade the CPU to the E8500, upgrade to at least 4GB of RAM, get the 64-bit version of Vista, upgrade the PSU so you can take advantage of SLi latter, and upgrade the video card to a single 9800GTX. I really think that for what they are charging you should just add the second 9800GTX yourself, it's really not that hard. If you want them to do it for you though then go ahead if you can afford it. If you have them money to go for two 260s then why not go for it? Personally I think it's a lot of money and that you should go with two 9800GTXs.