ADDITIONAL COMMENTS: (Quiet PC, good case, good PSU)
I have read the guide by Proximon which was a great help but I am still a bit lost so please bear with me.
I have never built a PC before, just changed a couple parts in my current rig, but thought I would give it a bash. I've been mulling this over for the past week and a friend gave me a list of parts from a site he uses but I have no idea if it's any good or that I could be getting more for my money, but after seeing what some folk spend I guess I am pushing it there. My mate also recommended to get XP rather than Vista but I am not sure about that.
Ive looked through your parts and i think the E8500 is a good choice.
Alternative PSU or
Alternative Motherboard This is a great mobo i have one and you can check out what ppl are saying about it on `overclock.net`.
Alt GFX card this is the same card but has 1GB memory which makes a lot of difference. Or you might want to try one of these, they overclock very well and are great for Xfire
Alt Hard Drive The 1TB Samsung is much faster than the 500GB and gets rave reviews.
These are the only things i would change except maybe a bigger case with better cooling because the mobo overclocks very easily and you may want to add a larger cpu cooler and your case will restrict your choice.
For a Dual Core I was thinking about an E8500 (137.99GBP) for a Quad Core I was looking at either the Q8400 (136.99) or the Q9550 (169.98). My mate said Quad Cores aren't worth it but looking at some charts the Quad Cores generally did better. Which CPU?
^ quad cores are worth it nowadays, especially that games can use them and they give breathing space for the OS and AntiVirus.
get the Q9550.
however on your budget, I would consider an i7 build with a 4850 and a good 650w PSU, then add another 4850 when you can afford it, this will last a lot longer than going with a core 2 build with a single graphics card.