VERY FIRST system build help

Get vista 64 bit with the upgrade coupon to windows 7 from newegg. What resolution are you going to be playing at?

Swap the HDD out for this, its $5 more but its a single platter so it will be faster
http://www.newegg.com/Product/Prod [...] 6822148395

Swap the PSU out for this one, the little red switch on the back of the one you linked it a very bad sign. Same price after MIR.
http://www.newegg.com/Product/Prod [...] 6817341017

Depending on your resolution i would change out your GPU, you can get a 4870 for less.

For 460 you can easily get an AMD 955 build with DDR3 so you will be able to upgrade it in the future.
http://www.newegg.com/Product/Prod [...] 6819103674
http://www.newegg.com/Product/Prod [...] 6813131366
http://www.newegg.com/Product/Prod [...] 6820144264
Comes to $421 before $15 MIR, saving you 54, if you do go with the AMD build i definitely suggest an ATI card so you can crossfire in the future.

Link to an i7 setup that would keep him under budget if you could, im curious to see it(i suck at finding the budget i7 boards)

Why pay 140 for a PSU when the Corsair 750TX is just as strong and only 120 with a 20 MIR, or he can get a TP-750 combo'd with his case for significantly less
http://www.newegg.com/Product/Comb [...] mbo.232529

I don't think an i7 is appropriate for his budget if he plans on gaming. He would have to increase his budget by roughly $120 dollars to get an i7. On the other hand, FoxFlames, you may consider this budget increase worthwhile. The i7 920 is truly superb. With a descent air cooler, you could overclock to 4 ghz without voltage increase (if you get a D0 stepping model). Otherwise, I recommend you get a AMD Phenom II model. It is faster and cheaper than an Quad core Q9650. It also had more upgrade potential, since the lga 775 socket is basically dead (the core 2 socket). Either way you go, you won't be disappointed by the performance. Good luck!