Complete gut of P4 system for Occasional video editing or HTPC

And Most Importantly, Why I’m Upgrading: I have 2 out dated systems that aren’t broke but I have decided it might be time for an upgrade. Mostly to edit (I.e. crop and put together to burn onto DVDs) family videos. Playing games is currently not a must but eventually I’ll probably play a few occasionally (games like Oblivion/Skyrim no FPS).
Current systems:
1. This system will most likely be the one I gut:
Antec Sonata ATX case with Antec Earthwatts 500 watt PS
IDE DVD, and DVD/CDRW drives (would like to not have to replace with SATA….but will if I must)
2 Sata Harddrives, Mouse, keyboard…etc
Here’s the good stuff that really needs replacement: Prescott P4 3.4 CPU, ASUS MB, 2gb sweet ddr RAM, Geforce 7800 OC AGP video card
2. System currently used as HTPC:
Velocity Promagix E2045
500W Velocity Micro™ Power Supply with Dual Fans, P5N-E SLI, E6550, Geforce 8600 GTS, 2GB DDR2
If my HTPC system is good enough to edit my family videos (AVCHD), I doubt the Sonata system can serve as a HTPC playing MKVs? Ideally I’d like to move the Sonata case to become my new HTPC and perhaps beef up the current HTPC for office use if necessary. Bottom line: Does it make the most sense to build a new office comp for video editing and just move my current HTPC to the Sonata case. Or should I just use my HTPC for video editing and set something else up in the Sonata case for a HTPC(current display is a 42” 720 but will probably go to 55”+ 1080 within the next year or two)?
I saw this on slickdeals this morning but was already OOS just would have needed some DDR3 RAM and this would have been right up my alley!

Approximate Purchase Date: within next month or so

Budget Range: 300-400 max, cheaper the better

System Usage from Most to Least Important: home office use, editing family videos/photos or HTPC if my current HTPC can handle my requirements well enough for occasional video editing

Are you buying a monitor: will take recommendations 24” max (currently using 19” non wide screen)

Parts to Upgrade: CPU, motherboard, RAM, video card? (Current power supply is Antex Earthwatts 500 ~4 years old)

Do you need to buy OS: current XP SP3 license…should I get 7 for this re-build?

Preferred Website(s) for Parts: but will take others

Location: Bremerton, WA…although will be traveling to Modesto CA in a few weeks

Parts Preferences: intel CPU preferred…but can be convinced otherwise

Overclocking: probably not

SLI or Crossfire: No

Your Monitor Resolution: impartial

Additional Comments: will be using cyberlink powerdirector for video editing
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More about complete system occasional video editing htpc
  1. Hmm with a tight budget and with casual video/photo/gaming i think the quad Llano is gonna shine here - have a look at Toms article findings here

    Can OpenGL And OpenCL Overhaul Your Photo Editing Experience?,3208.html

    So reuse your hdd/odd/case/psu

    A8-3870K + 8GB DDR3 1600 $135 ($15 off with promo code for the chip)

    Budget OC board for Llano $70
  2. You may want to 'stand-by' and check out the new AMD Trinity/FM2 in the next month or so ...
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