Seeking Advice on Strict Budget Developer Rig


I am a programmer, currently using a sad system...

This was my "home server", but turned it into my desktop after getting rid of my laptop

Mini ITX Case (250W PSU)
Intel Motherboard / Intel Atom D510
2GB DDR2 800mhz
500GB Hard Drive
13" Monitor

Now, shockingly, this is barely running Visual Studio 2010..
I am planning on doing some adjustments to make it a lot better to develop on..
My goal is to replace parts only necessary to speed it up (13" monitor sucks but works..)
I have a few ideas, but need some ideas from you guys.
Remember, this won't be for games, so video card is not required other than on-board.
I'm happy with 8GB min, would like to upgrade to 16GB though.
Big question I have is.. i5 or 6 core for development?
My sad budget is approximately $400 (this can be flexible a bit)

Option 1:
GIGABYTE GA-H55N-USB3 LGA 1156 Intel H55 HDMI USB 3.0 Mini ITX Intel Motherboard 104.99
Intel Core i5-760 Lynnfield 2.8GHz 8MB L3 Cache LGA 1156 95W Quad-Core Desktop Processor 208.99
CORSAIR XMS3 8GB (2 x 4GB) 240-Pin DDR3 SDRAM DDR3 1333 Desktop Memory 89.99
Total: 403.97

Option 2:
CORSAIR XMS3 8GB (2 x 4GB) 240-Pin DDR3 SDRAM DDR3 1333 Desktop Memory 89.99
ASUS M4N68T-M V2 AM3 NVIDIA Geforce 7025/nForce 630a Micro ATX AMD Motherboard 54.99
Pixxo CM-9287 Steel MicroATX Mini Tower Computer Case 300W Power Supply 34.99
AMD Phenom II X6 1100T Thuban 3.3GHz, 3.7GHz Turbo 6 x 512KB L2 Cache 6MB L3 Cache Socket AM3 125W Six-Core Desktop Processor 239.99
Total: 419.96

I'm thinking about Option 2 more since will get me off the Mini-ITX and can still use the Home Server as it was built for.
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