First time build want to reuse existing parts

I need your expert help. I want to build a new system using parts from my existing PC and some new parts. I'd rate myself about a 3 or 4 on a technical scale of 1-10, I've never done this before so a little worried. This pc is mainly the family pc used for simple things like homework, surfing the web, and used to feed dad's gaming habit. I'm not interested in doing anything fancy, like overclocking or getting the utmost performance. Just trying to build something respectable on a budget of $350-$450.

Here's what I have:
-5 yr. old Dell inspiron 530 (everything is 5 yrs old except psu and vid card, which are about 1.5 yrs. old)
-Win Vista Home Premium 32 bit
-3GB ddr2
-core 3 duo E6550 2.33 ghz
-500w psu
-hd radeon 5770 1gb gddr5
-dvd/cd drive (HL-DT-ST DVD+-RW GSA-H73N ATA Device)
-500gb HD (WDC WD5000AAKS-75YGA0 ATA Device)
-a card reader/usb thingy in one of the external drive bays
-Samsung 22" 2220wm (1680 x 1050 max)

Here's what I'll buy:
-i5-3570k or i5-3450 or i5-3470
-new mobo looking at this one GIGABYTE GA-B75M-D3V LGA 1155 Intel B75 SATA 6Gb/s USB 3.0 Micro ATX Intel Motherboard
-2x4GB ddr3 1600
-Case mid tower, haven't picked one yet, would reuse the dell case if I could get away with it but pretty sure you guys will tell me it's a bad idea. So yeah, will choose something in the $40-$60 range

Here are my questions:
-Anything not in the "will buy list" I want to reuse in the new build. Can I do this? Can I frankenstein different parts together like this?
-This is my first time, should I be worried or can I assemble this myself?
-Can I reuse the HD and the OS this way? I'll upgrade to Win8 x64 on an SSD next year, but hoping to be able to stick with my vista OS for now to spread out cost.
-The mobo I'm looking at has one pcie v3.0 x16 slot, can I put my existing card in that, or do I need to get a board with a v2.0 slot? I'll upgrade my vid card next year too, so not sure if I need a board with both.
-Any concerns about the micro-atx mobo, it has everything I think I need at a good price.
-Am I ok with the stock cpu cooler? I won't be overclocking.
-What do I do with the old parts? Just chuck 'em? I know they're old but I'm a frugal guy and hate to see things go to waste.
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More about first time build reuse existing parts
  1. It's a Cooler Master
  2. So I'm not hearing anybody raise a caution flag, so assuming I should be good to go. My main concern is on the hard-drive and OS questions (i.e. can I use my current HD and OS) and on the pcie 3.0 slot question can my vid card work in the 3.0 slot. Thanks for any help, you guys are great!
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