I'm thinking thats around $1000 CAD, so here's my quick recommendation:
i5 760 processor
P55 motherboard (your choice - Gigabyte is my favorite)
4gb DDR3, see what is on sale, the faster the speed, and the tighter the timings the better
GTX 460 1gb OC / Radeon 6870 video card (both look nice right now)
500gb / 1tb hard drive
550w PSU for a single video card, 650-700w if you want SLI / Crossfire in the future
Antec / Coolermaster cases are my favorite - check out the 300 / 900 or the new DF-30/35, Storm Sniper, HAF 922, 690II Advanced, etc.
Anyhow, there's a really really rough build. Hope that helps!
@jason - Part prices are usually the same numerically in the US and GB, so I'm guessing he has the equivalent of $400-600 here in the US.
PF85, what websites are you using? It will help us get a better idea of what brands and prices we're talking about.
If you're intentions are to build a cost effective computer, go with AMD. Their Phenom II X4s are a great price for their gaming performance, and overclocking is pretty easy from what I hear.
You'll want 4GB of RAM. The biggest determining factor of the RAM's performance is the Cas Latency; the lower it is, the better. This is followed by timings; again lower is better.
Don't bother getting a factory overclocked GPU; it's very simple to overclock a GPU using simple software (I use MSI Afterburner). You'll save money that way. I'd look at the 1GB GTX 460s, and the 6800/5800 series AMD GPUs. Since you're gaming @ 1600x1200, you're going to want a good GPU.
The number/type of GPU affects your PSU choice. Let us know what brands you can get, because the brand makes all the difference.
The case is your personal preference. Look up some reviews of ones you like, because sometimes the included fans die or certain GPUs won't fit (rarely happens in ATX mid-towers). Also, get one with the PSU mounted on the bottom, as your case will be more stable.