Modest gaming rig for my sister ~$1k

I don't see a video card on that list. If you plan on playing games on higher settings, you'll want one. 4770s are great budget cards if you can find them in stock, and will be perfect for your resolution. If you want something with a bit more juice, you could grab a 4870/4890 or even two 4770s in crossfire.

I'm using the Windows 7 64bit RC1 as my main OS now, and it's worked very well. Haven't had any issues so far.

Just finished a build myself, same idea, gaming, video, general home use. I stuck with the AMD 940 since its AM2+ and I don't want to mess with a bios flash for AM3 support. Most boards I looked at need a flash so AM3 is out for now. The 940 gets the job done for anything I can think of so it's better $ wise. You might consider dumping the cooler, the stock hs/fan are really pretty good, doesn't sound like you are going to overclock. I would bump my pSU to the 600-650 range, Corsair makes a good modular PSU, or do what I did nad go PC Power and Cooling for the single 12 volt rail. I don't see a gpu specked here, but your board will play real well with a radeon 4870, I have Sapphires card best Newegg reviews and it works great. ATI set up the GX series to marry with the 4800 series so it's a good solid performer. I wouldn't game w/o dedicated graphics. As to the OS, grab a system builder Vista Home Premium 64. You will avoid potential driver issues with RC7. I won't migrate to 7 untill the OS has been around for awhile and the bugs are sorted out. Get the RC for yourself and play with it in dual boot, remember it isn't supported! Hope this helps.

Case: COOLER MASTER RC-690-KKN1-GP
Good Case

CPU + Mobo: ASUS M4A78T-E AM3 + AMD Phenom II X4 955 Black
You can spend a little more and get the Core i7 that has superior performance overall, personal preference to people though.

PSU: SeaSonic M12II 500W Modular
Good PSU but 500W is a bit weak if you plan to upgrade in the future. Check out PC Power and Cooling S75QB Silencer 750W Quad Power Supply for $70 not modular though, but it's PC P&C one of the best PSU brand and it's 750W versus 500 or 620
http://www.zipzoomfly.com/jsp/Prod [...] e=10005611

Ram: G.SKILL 4GB (2 x 2GB) 240-Pin DDR3 SDRAM DDR3 1333
Good I guess, G.SKILL is good brand there are $40 memories though I remember but probably not G.SKILL

HD: Western Digital Caviar SE16 WD3200AAKS 320GB 7200 RPM SATA
Okay this sucked, $55 for ONLY 320GB... spend a little more and get 1Tb at least. I seen plenty of 1Tb drives for around $100 or recently plenty under $100!

Optical: LG 22X DVD±R DVD Burner
Okay

Cooler: XIGMATEK Dark Knight-S1283V 120mm Long Life Bearing CPU Cooler - Retail
Okay, you can also check out sunbeam core contact, perform identical and cheaper with rebate by abuot $15 bucks

GPU: Nvidia 260 216 Core recently could be bought for around $150-$170 check them out. Or you can check out the ATI 4890 which I seen for around $180-$200 which is also very sweet.