First time building a computer from scratch, what should I buy?

Less than $1,000

If you're not a gamer, or just a light gamer, I'd say a Llano build would be the best fit for what you're describing. They don't do bad in games, and don't require a discrete graphics card, however one can be added for additional performance. This setup will exceed your described expectations.

CPU and Graphics: $140
http://www.newegg.com/Product/Product.aspx?Item=N82E168...

Motherboard: Asrock FM1 $90 .
http://www.newegg.com/Product/Product.aspx?Item=N82E168...

RAM: Gskill 1600mhz $47
http://www.newegg.com/Product/Product.aspx?Item=N82E168...

PSU: Antec Earthwatts 380D $45
http://www.newegg.com/Product/Product.aspx?Item=N82E168...

Windows7: $100
http://www.newegg.com/Product/Product.aspx?Item=N82E168...

Hard Drive: WDC Caviar Blue 500GB $80
http://www.newegg.com/Product/Product.aspx?Item=N82E168...

Case: Your choice, pick something you can be happy with. Price can range from 30-200 bucks, buy something modest.


Total without Case: $502

If you need an optical drive, CD/DVD-R, they run about 20 bucks.

This is a good home system for general use , except the motherboard which is mini-ITX .
Use
ASRock A75 PRO4 FM1 AMD A75 $90
http://www.newegg.com/Product/Product.aspx?Item=N82E168...

The only component I'd add would be an SSD . A solid state hard drive to install windows and programs on . 120 gig or so should be fine for that . You will boot faster and load programs faster too so the computer feels very responsive .

OCZ Agility 3 AGT3-25SAT3-120G 2.5" $99
http://www.newegg.com/Product/Product.aspx?Item=N82E168...

For a case with the same power supply included try
Antec NSK 4482B Black 0.8mm cold rolled steel ATX Mid Tower Computer Case 380W Power Supply $94
http://www.newegg.com/Product/Product.aspx?Item=N82E168...

I'm sorry, I missed that it was an itx. My mistake, thanks for pointing that out.