$500 Gaming Rig, is this going to work?

will it work... do you mean when you assemble the whole thing and flip the power button will it power on? If so, then, if you are careful and make no mistakes then yes...
The HD4870s that i've used are not that loud... just adjust the fan manually using ati overdrive utility. I'd go quadcore Phenom II 945 or 955 if you can justify the extra $30 bucks that you shouldn't spend on the gpu fan in my opinion...

I have found 2 GPU cooler that may potentially work:
http://www.newegg.com/Product/Product.aspx?Item=N82E168...
http://www.newegg.com/Product/Product.aspx?Item=N82E168...

Would these work and be quiet?

Sorry for the confusion, I meant whether this set up is good.
I am not sure about getting a quadcore, for the same $30 buck or so, if I don't get a GPU fan, I can probably get a HD 4890, which IMHO would produce a bigger improvement in gaming experience.

Eeeh, I'm not sure I agree with an hd4890 upgrade being better than a tri to quad core upgrade.... That fourth core will provide an excellent boost in frame rates... If you go with quad core you will have the option to move to crossfire without a cpu bottleneck... hd4870 with a quadcore will most certainly have better gaming performance than a hd4890 with a tri-core... but i have no contextual evidence to back that up... if i find some i'll let you know.

There are two series of benchmark done by Tom's Hardware that tests how multicores effects gaming. The finding is that performance improved dramatically with addition of a 2nd core, improved a little with a 3rd core, and most games either suffered a slight performance penalty or see no change with a fourth core.

I've seen those but in my experience a quad core is much better than a tri core. Remember, benchmarks can be deceiving... (best example off the top of my head: GTAIV's benchmark). Do what you think is best but if it were me I'd go with the quad core & 4870 over the tri core with a 4890...

have you considered the p55m ud2 and the i5?

i5 would be nice (extremely nice in fact), but at $200, it is significantly more expensive than the X3 720 (about $70 more), and the p55m mobo also cost about $30 more than the corresponding AM3 mobo. This will cause a budget overrun of $100.
But if I forget about the aftermarket CPU fan and get a cheaper PSU, i may be able to squeeze it in. Thanks for the suggestions, I will definitely look into that.

I hate to be that guy, but Intel is just the way to go for gaming... i3-2100 vs Phenom II X3.
Faster Ram, faster CPU. SSD and a 1tb HHD. Great GPU. case is up to you, spend more or less for preference. Reliable, Tier 2 PSU.

You would not need an after market CPU cooler, even for your Phenom II X3 and In no way would need an aftermarket GPU cooler. However, if you do want an after market cooler, the answer is always CM 212+ or CM 212+ EVO. To reiterate, I don't need an after market cooler for my overclocked Radeon HD7970, so you would not need one for a 6870 and definitly not for a 4870.

PCPartPicker part list / Price breakdown by merchant / Benchmarks
CPU: Intel Core i3-2120 3.3GHz Dual-Core Processor ($124.99 @ Newegg)
Motherboard: EVGA 120-SB-E672-KR Micro ATX LGA1155 Motherboard ($49.99 @ Newegg)
Memory: G.Skill Ripjaws X Series 4GB (2 x 2GB) DDR3-1866 Memory ($39.99 @ Newegg)
Storage: Samsung Spinpoint F3 1TB 3.5" 7200RPM Internal Hard Drive ($69.99 @ Newegg)
Storage: Plextor M5S Series 128GB 2.5" Solid State Disk ($84.99 @ Newegg)
Video Card: XFX Radeon HD 6870 1GB Video Card ($166.49 @ Amazon)
Case: NZXT Source 210 (Black) ATX Mid Tower Case ($35.99 @ Newegg)
Power Supply: Antec 450W ATX12V Power Supply ($34.98 @ Amazon)
Total: $607.41
If you have a Microcenter near you, then you can pick up a i3-2100 for $90

PCPartPicker part list: http://pcpartpicker.com/p/gaBJ
Price breakdown by merchant: http://pcpartpicker.com/p/gaBJ/by_merchant/
Benchmarks: http://pcpartpicker.com/p/gaBJ/benchmarks/

CPU: Intel Pentium G620 2.6GHz Dual-Core Processor ($63.99 @ Newegg)
Motherboard: ASRock Z75 Pro3 ATX LGA1155 Motherboard ($84.99 @ Newegg)
Memory: Crucial Ballistix 4GB (1 x 4GB) DDR3-1600 Memory ($27.97 @ CompUSA)
Storage: Samsung Spinpoint F3 1TB 3.5" 7200RPM Internal Hard Drive ($69.99 @ Newegg)
Video Card: Asus Radeon HD 6870 1GB Video Card ($179.98 @ NCIX US)
Power Supply: Rosewill 530W ATX12V / EPS12V Power Supply ($54.99 @ Newegg)
Optical Drive: Asus DRW-24B1ST/BLK/B/AS DVD/CD Writer ($19.98 @ Outlet PC)
Total: $501.89
(Prices include shipping and discounts when available.)
(Generated by PCPartPicker 2012-08-31 14:35 EDT-0400)

Mine actually stays within budget.

- I don't know why you would try to fit an SSD into a budget gaming machine.
- I wouldn't trust that PSU that isn't even 80+ certified
- I definitely wouldn't recommend a MicroATX EVGA motherboard for future upgrades either.. Kinda funny cause the Mobo is only SLI-Ready and he got you a Radeon GPU 0__0

Anyway, my rig may go a bit under on CPU power, which doesn't really matter, considering it definitely won't bottleneck a 560ti or 6870. I got you components that will survive an upgrade, good MOBO/Good PSU/Great Case for airflow etc.