£300 Light Gaming PC (not inc. monitor)

On Tuesday night my computer which was about 5 years old blew up. It seems the motherboard or cpu failed which shorted the power supply. Because I can't work out what exactly is broken and it's so old anyway I'm going to discard it and build a new PC. I already have a PS3 and HDTV so that is what I mainly use for gaming so this will just be used for normal stuff like web browsing as well as playing Football Manager and maybe America's Army (FPS game).

CPU: Intel Pentium Dual-Core, E5200, Socket 775, Wolfdale Core, 2x2.5 GHz, 2MB Cache, Retail
http://www.scan.co.uk/Product.aspx?ProductId=26138

GPU: 512MB XFX HD 4850 XXX, PCI-E 2.0 (x16), 2100MHz GDDR3, GPU 650MHz, 800 Cores, 2x DLDVI-I/ HDTV, HDCP
http://www.scan.co.uk/Product.aspx?ProductId=28125

MOBO: Gigabyte GA-P31-ES3G, iP31 Express, S 775, PCI-E (x16), DDR2 1066/667/800, SATA II, ATX
http://www.ebuyer.com/product/151053

RAM: 2GB Corsair XMS2, DDR2 PC2-6400 (800), 240 Pins, Non-ECC Unbuffered, CAS 5-5-5-18
http://www.scan.co.uk/Product.aspx?ProductId=25249

HDD: 320 GB Western Digital WD3200AAJS Caviar SE, SATA 3Gb/s, 7200 rpm, 8MB Cache, 9 ms
http://www.scan.co.uk/Products/320 [...] Cache-9-ms

PSU: 425w HiperPower HPU-4S425 V2 SLi Black ATX2.2 (20+4) SATAx2 PCI-Ex1
http://www.scan.co.uk/Products/425 [...] x2-PCI-Ex1

CASE: Coolermaster RC-330 Elite Blk/Silv Midi Tower Case w/o PSU (New Improved Version) Scan Exclusive
http://www.scan.co.uk/Products/Coo [...] -Exclusive

Total price £295

I shall be raiding my old PC for an optical drive, wireless card, monitor, keyboard and mouse.

Is the GPU too powerful compared to the CPU, I'd rather downgrade the GPU than upgrade the CPU but I am willing to listen to any suggestions. Just to bear in mind I have a 15" 4:3 TFT at the moment but may upgrade to 19" widescreen TFT soon.

Thank you in advance.

Shall be buying the parts tomorrow so speedy replies are greatly appreciated