First Gaming Build Critque

I would really appreciate it if someone could look over my computer build to see if any issues stand out about it. Thanks in advance.
As you may have concluded it will serve as mainly a gaming rig. With that said I am new to the PC world and have forever used integrated video cards on computers that would be mediocre in 2004. I'll be ecstatic if I can run even Diablo II (yes II, not III) on max settings with good FPS. I really won't be expecting much out of this rig for high end games in terms of graphics but if I can run most games on normal settings smoothly, I will be more than happy. Other than gaming nothing else I do on the system (at least at this time) will be very demanding.

Here is my current build at this time:

CPU: AMD Phenom II X4 965
GPU: HD Radeon 7770
Memory: ADATA XPG Gaming Series 8GB
MotherBoard: ASUS M5A97
Optical Drive: SONY Drive
Cooling: CORSAIR H60 Water Cooling
Case: NZXT Phantom

At this time I have bought most everything I have listed above but I have some things on my mind about the components.

1) I really want to buy an i5-2500K Processor based some things I have heard about the CPU but is it really worth it? I already purchased the above CPU from a friend for around $70. Will the Phenom be fine for me for awhile?
2) In regards to the PSU I have found mixed reviews about APEVIA. I just need it to last me a good few months and I'll be happy. I am getting impatient saving up my money for this rig and this PSU is at a good price for the Wattage it gives off in my opinion. Am I being foolhardy?
3) I plan to overclock my Phenom (once I Google how to overclock it). Is the Corsair H60 really necessary? Or can I get away without it and save some money?

Do any of my above thoughts seem valid? If so let me know along with your opinion of this build.

Thanks a bunch
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  1. I would perfer the i5-2500K, its WAY better, if your planning to overclocking it get a better motherboard (Z77), and personally I don't like water cooling just because if something is wrong or corrupted, it would take a lot of *** to fix it. So i think the water cooling is unnecessary. And if you have a few more bucks, I would upgrade the GPU to a 7850, cus its the best budget performance out there right now.
  2. No point in a Z77 board with an i5-2500k. Get Z68.
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