BUDGET Video editing, graphic card necessary?

Hi guys,

I am tasked with building a budget video editing PC for a buddy, $500ish, that's it. It is going to be exclusively used for HD editing with Vegas Pro 9, rendering, etc... nothing else, no gaming no internet!
In order to save money I was planning on simply using the onboard graphics. Is that advisable? I hear tech support horror stories about onboard graphics.
Can you guys give me a recommendation regarding suitable parts? I have been out of the game for a long time :(
I am thinking, cheap case, Mobo and CPU combo with overclocking potential and easy upgradability in the future. Here's my idea:

AMD Phenom II X4 955 Black Edition Deneb 3.2GHz 4 x 512KB L2 Cache 6MB L3 Cache Socket AM3 125W Quad-Core Processor

MSI 880GMA-E53 AM3 AMD 880G HDMI SATA 6Gb/s USB 3.0 Micro ATX AMD Motherboard

G.SKILL Ripjaws Series 4GB (2 x 2GB) 240-Pin DDR3 SDRAM DDR3 1600 (PC3 12800) Desktop Memory Model F3-12800CL9D-4GBRL

Can you guys help me out with the additional stuff, or better suggestions? I'd really appreciate it! Thank you all!
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