It will all work together. I have been struggling to think of a way to improve it, without increasing price, without any success. Given your budget limitation, I think you've done quite well. The performance is not going to be amazing, but short of suggesting you wait, if necessary, until you can put a bit more cash in, there's nothing constructive I can add.
I think you can get way more than that for 500 dollars. Getting all your parts from the same site though ideal, will not give you the best value. Try buying from ncix.com, they have a free shipping and have generally lower prices. I have seen people fit in a pentium g850 and a hd 7750 w/ 350 antec psu (and all the other parts w/ os) for $500 even. That suggested build would be significantly better than the one you suggested. Newegg, Tigerdirect, and NCIX are all great places to buy from. I hope you enjoy your build.
Problem is, it's not really $500 BUILD, it's $400 build + OS. The one thing OP's build has going for it, is that it will be reasonably easy to upgrade, a bit, when funds are easier. Loathe to suggest anything, that's going to make that more difficult, unless it gives a decent short term gain.
One possible suggestion, if OP has access to local enthusiast site, is second hand for a better CPU and GPU. Wouldn't suggest he did that on the "open market" though.
Stronger CPU (3.0Ghz and will use 1333mhz memory) and the GDDR5 version of the HD 6670 (much faster)
the Rosewill Case/PSU combo, while not ideal is better than most and the below setup won't tax the PSU that hard so you should be ok.
Microsoft Windows 7 Home Premium Edition 64BIT SP1 DVD OEM $79.99
Savings Code 45271-1219. SAVE $19.99 off our regular price of $99.98 if you buy today! Special price ends 09/12/2012. Limit 2 per customer http://us.ncix.com/products/index.php?sku=45271
ASRock B75M-GL LGA 1155 Intel B75 SATA 6Gb/s USB 3.0 Micro ATX Intel Motherboard http://www.newegg.com/Product/Product.aspx?Item=N82E168...
Item #: N82E16813157326
$239.95 +$14.02 Shipping =$253.97 ($15 MIR also with the GPU)
496.92 including shipping ($15 MIR also)