You are in for a treat.
What is your budget?
A 500w psu will power a modern 28nm graphics card as strong as a GTX670 or 7950.
Assuming it is a quality unit with 2 6 pin connectors, you can reuse it.
P67 is a bit outdated. Z77 should cost no more and has some added advantages.
Plan on $100-$150.
Times have changed. Your $999 dual core was top of the line some time ago.
It had a passmark rating of 1918.
Today, a i3-3220 which costs $120 or so has a rating of 4274.
Today's top gaming cpu is the 3570K quad core with a rating of 7142, and that is before a conservative overclock from 3.4 to 4.3.
And... no water cooling is needed. A $30 hyper212 will do the job.
Raptors were wonderful in their time.
But today, any SSD will be 50x faster in random i/o and 3x faster in sequential.
No raid needed.
Ram is also cheap. A 8gb kit of 2 x 4gb DDR3 1600 will be $40.
Your old DDR2 is actually more expensive and has a resale value on ebay.
If you have not upgraded to windows 7, I would do so. I think I wouuld bypass w-8.
Put together a list of parts and links so we can see what you are thinking.