Both are capable cpu's with the i7 is slightly better at higher cost. You want the best? That's your cpu, you want as good as but cheaper? The Phenom II's are amazing gaming chips and nobody can argue against it.
Aim for a single 5850 graphics card minimum, possibly a 5870 or best case would be two 5850's in crossfire - this will definitely push you towards your upper limit but you get more performance accordingly.
You could perhaps get a phenom II 940 with ddr2 ram, 'gx' type am2+ mobo for really cheap, then go with two 5850's. That is cheap and extremely powerful. For the same cost you would just about manage an i7 and one 5850, but it won't be as good in gaming. However, if you ever decided to buy another card later then of course the i7 and two 5850's would be a little better again....
It's too difficult to say exactly, so spend a bit of time evaluating each option.