HDD: Ditch the WD and pick up some Samsung Spinpoint F3 (500 GB for $55 or 1 TB for $85). These are the best HDD available, and some of the cheapest. They use 500 GB platters, so they're faster and quieter than the WDs. (EDIT: Deactivate on Newegg.ca, but worth it to check elsewhere)
Mobo: It's a good board, but I have one I prefer to suggest. ASUS M4A79XTD EVO. This is one of the best values in motherboards.
Optical: You want a SATA model (like this one), not an IDE. Should get a 24x burner.
Ok, with that out of the way...
I really suggest you go with an i5-750 build on that budget. The i5 is best CPU for gaming, and while more expensive, it's within you budget. All that would really change is the mobo, which is an easy recommendation: GIGABYTE GA-P55A-UD4P. This board supports USB 3.0 and SATA 6 GB/s, meaning it's very future proof. It's also the newer Gigabyte models, so it doesn't have the overclocking problems of the previous Foxconn versions.
Since your still not touching the $1500 budget, I'd almost recommend buying a bigger monitor to make use of that 5850, but there's some choice. Crossfire the 5850 (completely unnecessary) or get an SSD (also completely unnecessary). Or you could start doing something stupid like shelling out $450 for a 5870 (or $600 for a 5970 Not active on Newegg.ca), neither of which will be used fully without the large monitor. Frankly, you're in the middle range of the budget. To close to get anything useful, but too far away to need to make improvements.
The reason I can't recommend the SSD is that you won't get any more FPS out of buying it. All you'll get is faster boot and load times, which I don't think those few seconds are worth the $100+ premium you'll pay for a large enough SSD.
The reason I can't recommend the GPU options (Crossfire or the outrageously expensive single cards) is that you resolution is only 1600x1200. Anything more than the 5850 is a waste of money.