The December sytem builders marathon $500 rig was an Athlon II x3 and a GTX 460 this will give you an idea how it will perform for you they even did overclocked benchmarks too.
and btw should i replace the gtx 460 with an hd 5770?
I would get the 460 not the 5770.
yeah ..I agree ..although the 460 is a bit more expensive than the 5770 it does outperform it by a slight margin .. but why don't you look into a 6870 ? ..its a bit more costly ..but should still fit into that 500$ budget ..