Your cpu isnt too bad, but if you have the money go for the 920, its pretty cheap now. And i have had problems with dualbooting 2 windows OSs on one hdd, partitioned or not, but thats just me. Other than that, its a good build.
I'd get at least an x3 phenom II. At $120, its a great price/performance chip. And if this is a build design and not something you'd purchased yet, try the homebuilt section. Lots of people to help this kind of question. Just read the sticky on how to post build questions.
If you haven't done any buying yet, I'd say get DDR3 ram/mobo. Reason being, when the next gen CPUs come out, I'm guessing that the DDR3 ram will work with them just like the AM3s work with both old and new standards and it really isn't that much more. Also, why 8 gigs of ram? Unless you're doing large video editing, you only need 4 gigs.
I agree with skora, 4gb of ram is good for what most people use their computers for, and also try to go for a PII, everybody who has one loves them. But if money is a big issue,your cpu will work just fine.
Thanks guys for the replies. I ended up getting the Phenom II X4 920, upgraded my case to the Antec 900 Gaming Case and got the Arctic Freezer 64 CPU Cooler. I need the memory because I tend to use photoshop and dreamweaver alot.