1st Build Assistance (Gaming)

First off I would like to thank everyone in advance for their assistance, I would say that my computer knowledge is mid level at best so bear with me. With that in mind, I have been perusing the forums and have compiled what may or may not be a decent build.

APPROXIMATE PURCHASE DATE: Summer Project (next 3months) BUDGET RANGE: $700 max

SYSTEM USAGE FROM MOST TO LEAST IMPORTANT: gaming, school, misc stuff.

PARTS NOT REQUIRED: keyboard, mouse, speakers, monitor.

PREFERRED WEBSITE(S) FOR PARTS: more reputable the better.

PARTS PREFERENCES: too noob for that.

OVERCLOCKING: would prefer to avoid, but it's whatever. SLI OR CROSSFIRE: doubtful

MONITOR RESOLUTION: traditionally 1024x768 atm, but monitor has potential for better.

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CPU and MOBO
I have two different options for this combination so far.

Option 1
Intel Core 2 Duo E8400 Wolfdale 3.0GHz 6MB($168)
GIGABYTE GIGABYTE GA-EP43-UD3L LGA 775 Intel P43 ATX Intel Motherboard ($80)
Total: $248

Option 2
AMD Phenom II X3 720 2.8GHz($139)
GIGABYTE GA-MA790X-UD4P AM3/AM2+/AM2 AMD 790X ATX AMD Motherboard ($110)
Total: $239

Memory
OCZ Platinum 4GB (2 x 2GB) 240-Pin DDR2 SDRAM DDR2 1066 ($63-25MIR=$38)

Hard Drive
Western Digital Caviar Black WD6401AALS 640GB 7200 RPM 32MB Cache SATA 3.0Gb/s 3.5" ($75)

Video Card
HIS Hightech H485FN512P Radeon HD 4850 512MB 256-bit GDDR3($115-$20MIR=$95)

Case
COOLER MASTER($75)
This seems to be the case that everyone is recommending in other cheaper builds.

Power
CORSAIR CMPSU-650TX 650W($100-$20MIR=$80)
Another component I have seen suggested a couple of times.

DVD Drive
LG Black 22X (CAV) DVD+R 8X DVD+RW 16X($24)
----------------------------------------------------
Total w/ Option 1: $635
Total w/ Option 2: $626
these both scrape the upper limits of my budget, so if you see anywhere to "trim some fat" that would be fantastic as well.

Also, as a side note, I'd like to hear everyone's opinions on the good 'ole XP vs Vista battle. I gave the forums a once over but didn't seem to find anything too recent.

Once again, I appreciate your time.

-edited to include Proximon's suggestions-

http://www.newegg.com/Product/Prod [...] 6811129042 $54.95 Free Shipping*
Antec Three Hundred Black Steel ATX Mid Tower Computer Case - Retail

http://www.newegg.com/Product/Prod [...] 6817341022 $74.99 ($49.99 after $25.00 Mail-In Rebate)
OCZ Fatal1ty OCZ550FTY 550W ATX12V / EPS12V SLI Ready CrossFire Ready Modular Active PFC Power Supply - Retail

http://www.newegg.com/Product/Comb [...] mbo.190818 Combo Discount: -$10.00 Combo Price: $189.98
GIGABYTE GA-EP43-UD3L LGA 775 Intel P43 ATX Intel Motherboard - Retail
Intel Core 2 Duo E7400 Wolfdale 2.8GHz LGA 775 65W Dual-Core Processor Model BX80571E7400 - Retail

http://www.newegg.com/Product/Prod [...] 6820231122 $47.99 Free Shipping*
G.SKILL 4GB (2 x 2GB) 240-Pin DDR2 SDRAM DDR2 800 (PC2 6400) Dual Channel Kit Desktop Memory - Retail

http://www.newegg.com/Product/Prod [...] 6814127430 $174.99 ($154.99 after $20.00 Mail-In Rebate) Free Shipping*
MSI N260GTX-T2D896-OCv4 GeForce GTX 260 896MB 448-bit DDR3 PCI Express 2.0 x16 HDCP Ready SLI Supported Video Card - Retail

http://www.newegg.com/Product/Prod [...] 6822136319 $74.99 Free Shipping*
Western Digital Caviar Black WD6401AALS 640GB 7200 RPM 32MB Cache SATA 3.0Gb/s 3.5" Internal Hard Drive - OEM

http://www.newegg.com/Product/Prod [...] 6827136153 $23.99 Free Shipping*
LG Black 22X (CAV) DVD+R 8X DVD+RW 16X DVD+R DL 22X (CAV) DVD-R 6X DVD-RW 12X DVD-RAM 16X DVD-ROM 48X CD-R 32X CD-RW 48X CD-ROM 2MB Cache SATA 22X DVD±R DVD Burner with LightScribe - OEM

Total: $641.88 | $596.88 w/mail in rebates

*Switch out psu and vid card with these down below for a cheaper version of that build.

http://www.newegg.com/Product/Prod [...] 6817341012 $59.99 ($49.99 after $10.00 Mail-In Rebate) Free Shipping*
OCZ StealthXStream OCZ500SXS 500W ATX12V / EPS12V Active PFC Power Supply - Retail

http://www.newegg.com/Product/Prod [...] 6814130468 $129.99 ($119.99 after $10.00 Mail-In Rebate) Free Shipping*
EVGA 512-P3-1150-TR GeForce GTS 250 512MB 256-bit GDDR3 PCI Express 2.0 x16 HDCP Ready SLI Supported Video Card - Retail
Free Cryostasis game w/ registration at manufacturer website

Total: $581.88 | $561.88 w/mail in rebates

http://technet.microsoft.com/en-us [...] ID=mscomsc <--- Save yourself some money on an o/s and dl the 64 bit version of Windows 7

In most titles, the 4850 will be far stronger:
http://www.tomshardware.com/charts [...] ,1050.html

Besides, you have the option to crossfire, don't eliminate that with an Nvidia card.

At higher resolutions the GTS 250 does better, which is probably what that chart reflects. It's actually the same card as the 9800GTX+. So unless you'll be playing beyond 1680X1050 go with the 4850. As I said it also leaves room to upgrade to crossfire if you decide to get a bigger monitor.