For a GPU, consider an ATI HD 5000 Series. Amazon has this: XFX RADEON HD 5850, although this will be out of your price window. You could also do an HD 5750 which will run about $150 (but has less performance).
You cant get it up and working without some kind of graphics card (though any old PCIE graphics card would work for getting it working).
You might get the i5 and a motherboard as a combo at microcenter. Gigabyte and ASUS seem to be pretty safe choices, ASRock, MSI and cheaper brands have had some issues with overvoltage protection. Also be careful with CPU installation as there have been issues with foxconn sockets.