Is all of this compatible?

I redid your build for quality/cost.

PCPartPicker part list / Price breakdown by merchant / Benchmarks

CPU: Intel Pentium G2120 3.1GHz Dual-Core Processor ($94.99 @ Amazon)
Motherboard: ASRock Z75 Pro3 ATX LGA1155 Motherboard ($79.99 @ Amazon)
Memory: Patriot Viper 3 8GB (2 x 4GB) DDR3-1600 Memory ($24.99 @ Newegg)
Storage: Western Digital Caviar Blue 500GB 3.5" 7200RPM Internal Hard Drive ($49.99 @ Newegg)
Video Card: XFX Radeon HD 7850 1GB Video Card ($149.99 @ Newegg)
Case: Rosewill Challenger-U3 ATX Mid Tower Case ($39.99 @ Newegg)
Power Supply: OCZ StealthXstream II 600W 80 PLUS Certified ATX12V / EPS12V Power Supply
Optical Drive: Lite-On iHAS124-04 DVD/CD Writer ($17.99 @ SuperBiiz)
Operating System: Microsoft Windows 7 Home Premium SP1 (64-bit) ($91.99 @ Amazon)
Total: $549.92
(Prices include shipping, taxes, and discounts when available.)
(Generated by PCPartPicker 2012-11-20 03:22 EST-0500)

I changed the processor because you will probably be using this system for gaming, which doesn't require hyperthreading which is the only advantage the i3 has over the pentium (in fact hyperthreading has been known to decrease game performance by, on average, 2%.)

I changed the motherboard because the business 75 chipset motherboards just aren't made for the tasks that the Z75 chipsets are.

I changed the memory because the memory you chose was wasting money.

I changed the graphics card because 1GB of VRAM is fine for 1920x1080 and no need to spend more, XFX cards are high quality.

This is optional but I would say change your case to the one I selected, just to save money. It also looks pretty good with all black exterior/interior w/ USB 3.0 headers.\

For the powers supply a lot of people seem to put the Corsair builder in thinking it is quality. It isn't, in fact it isn't even made by Corsair. It is rebranded, trust me on this.

Optical drive, no point in going in great detail, the iHAS is cheaper.

Well would you increase the quality of some parts (like the processor) if I made the budget $700? And could you also keep all of the parts at Newegg? It's ok if it goes over a little.

i3 would be fine if it fits the budget. It has slightly better performance in single-threaded things as well. Hyperthreading isn't even turned on by default, it's optional.

I wouldn't call the Ripjaws X a "waste of money" compared to that Patriot you linked. It's only cheaper 'cause of the rebates, but G.Skill has had relatively higher reliability feedback.   (not saying the Patriot is bad, it's good RAM).

Keep the 2gb of VRAM. Most modern games @ 1080p would go over 1gb now. That particular XFX uses a mediocre cooler as well - it's more or less the reference one.

Corsair CX(Builder) is mediocre as well, yes. I don't know where you got "a lot of people" though since the ones regularly posting here helping people know that for a fact and don't suggest it at all. The StealthXStream(or any OCZ Stream series) for that matter isn't any better as well.

The only OCZ PSUs that don't have reliability and failure issues are the Z- series.

I go around the new build forum a lot and I see people recommend it all the time, didn't know that about the Z-series, and the i3 is only $20 more.

dang the his 7850 i had in cart for 169 went out of stock. any other brand recommendations?