Don't take this the wrong way but if I spent $1600 on a new system, I wouldn't skimp on a water cooling system. I don't even know if $300 would be enough. As rubix said, you need to know your water block types and you may find that available kits may not have what you require. Just from my recent experience; 2 water blocks, a good pump, and a reservoir will push you at or over $300. Then there's the radiators, tubing, fans, and fittings. I my self just completed my first full water cooling system. It's not cheap by no means, especially if you want components that will last and get the job done. Just as an example: I'm cooling a i5 2500k and two GTX460s. Prior my GPUs were air cooled and they were overclocked as far as I could get them without any heat and artifact issues. Most of today's stock coolers tend to be pretty efficient at handling OCs. My i5 was a different story. I had a Corsair H50 which is a closed water cooling system. The H50 is somewhat equivalent to high end air coolers. I could only OC from 3.3 to 4.5 without going over 75c at full load. The cpu can go further just like your i7. The only way is through water cooling. I decided if I'm going to cool one, I might as well do my GPUs. These are decisions you have to make. If you aren't going to OC, then water cooling may be wasted unless it's just a preference. You can definitely air cool real well at or under $150. Me personally, I try and buy components that will go through several builds. This is a guess but I bet I spent upwards of $800-900 on my water cooling. I started my water cooling hunt sometime in Oct 2011 and final put it together just before Christmas. It's something to not hurry through because you may end up wasting money on crappy components or items you may find you don't need. I have about $150 worth of stuff I bought just to find they either wouldn't work as I intended or my build changed during the build. lol Planning is everything.
Read the stickies and ask questions about the components you choose. You will find that user experience more times than not trumps manufacture charts and graphs.