Need help with an Upgrade for Cheap

Hello everyone, I am a new member of this forum however I have been reading this forum for years. I am in the process of planning a rebuild of our main desktop. I am not a virgin to building, this will actually be like my 10th pc I have built. However it has been quite a few years since I did the last one and technology has changed quite a bit. My wife is into photo editing, meaning photoshop and I am into video editing, so this PC would need to address these needs. We do not game at all, I save games for the Wii, and PS2. Other then that basic office applications and web surfing would be required. Right now the system we are operating on is:

AMD Athlon 64 3700+
ECS KN1 Extreme
2GB PC2700 DDR Dual Channel
Nvidia GeForce 7300 LE

This system has become very slow for and at times becomes unresponsive while my wife is using photoshop.

Now here is where I need some help. I do not want to spend that much, and really this is going to be the biggest constriction. I am trying to keep my total around $500 for the upgrade. The case, and other peripherals, DVD burner, hard drives, can all stay with this new build. The only things I can see needing are:

Motherboard/CPU
Memory
Power Supply
CPU heatsink/fan

I put together some items from tigerdirect and was wondering what you all thought.

Motherboard: MSI DKA790GX
CPU: AMD Phenom II X3 720 Black Edition
Power Supply: DiabloTek PHD650 650W
Memory: 2 x 2GB OCZ Dual Channel Platinum PC8500 DDR2
Heatsink/fan: Thermaltake TR2-R1

All of these for a total of 426.93

What do you think of this option? I wanted a quad core, however the tri-core was much cheaper and from what I read this board makes overclocking very easy. Please let me know what you think, and if you can think of anything different that might perform just as well please let me know.

Thanks in advance.

Thanks for the finds, I can pair that motherboard and the processor I was going to get for like $234, not bad at all, now what about heatsink/fans, any suggestions?