This costs you $65 more than your Athlon combo and gives you a sandy-bridge CPU with hyper-threading already @3.1ghz. You can also upgrade to a stronger SB chip down the road. If the extra is too much, then your cpu/mobo combo with do alright but look how many tiers $65 gets you: http://www.tomshardware.com/reviews/gaming-cpu-overcloc...
Thanks for the all the info and references guys! Much appreciated. If I go with what I have listed now plus the $65 increase for the bio MOBO and i3 chip I'll at $436 after shipping. Sounds very doable (well everything but windows this paycheck and then buy windows on the next, argh).
Larkspur posted a very good response.
Whatever GPU you are able to get, make sure it has GDDR5 rather than DDR3 RAM on it; the difference in performance can be a couple of tiers on the GPU chart.
As you endeavor to make budget, please do not be tempted to get a cheap PSU. A quality modern PSU has full range active PFC (no little voltage switch) and some level of 80+ certification for efficiency. Just to keep things simple, I'd recommend a 380W Antec Earthwatts. Relatively inexpensive at around $45, it can power a HD6850. Corsair also has a decent 400W model, but I've only personally used the Antec (many times).
Edit: Ah, you were giving him "Best Answer" while I was posting. Nice!