Nice recommendation Lmeow, but I would like to go a bit higher with the PSU, I think 450W will give extra free room.
1. X3 is the lowest proc I can go for now. Please don't go below that if you can still afford it. And, perhaps you are lucky and can unlock the fourth core.
2. 2x2 GB RAM is more recommendable as 1x4GB.
3. HD5770 is actually my standard for mainstream gaming rig, but if it doesn't fit to the budget, just follow Lmeow's recommendation.
Hey dude, if you have microcenter nearby, might check them out, they've got a special going on, buy an AMD chip, get a free motherboard with it. So might be worth looking into, maybe it would put you over the top and give you enough to grab Windows 7.