i3 2120 + radeon 6950 is certainly your best option. Don't worry about a bottleneck. Here's a good deal for a PSU: http://www.newegg.com/Product/Product.aspx?Item=N82E16817151096
It's more than enough, leaving you some headroom. It's only a 5-$10 difference between this and a 500W unit.
You should buy a sub $70 motherboard if you're only planning on an i3 2120. You could invest some more money though, if your budget allows it.
Look for 1333MHz memory since it's generally cheaper. You could for models that support 7-7-7-21 speeds if the price difference is negligible.
I recall a few great articles on tom's that will lead you in the right direction.