Thanks for all your help, I think I will get a AMD+ mobo to future proof me for a while, the one i think im choosing is: ASUS M5A88-V EVO AM3+ AMD 880G HDMI SATA 6Gb/s USB 3.0 ATX AMD Motherboard $129
Ditching the GPU, since it has onboard graphics (probally upgrade later)
and then a more overclockable CPU AMD Phenom II X2 555 Black Edition Callisto 3.2GHz $88
Then keeping all the other parts that rvilkman metioned above
So still keeping it ~$400
BTW would this system work out? I have no idea...
Thanks so much for all your help, now to order parts