$500 HTPC for gaming, XBMC, and 3D Blu Ray

PCPartPicker part list: http://pcpartpicker.com/p/srCl
Price breakdown by merchant: http://pcpartpicker.com/p/srCl/by_merchant/
Benchmarks: http://pcpartpicker.com/p/srCl/benchmarks/

CPU: Intel Pentium G860 3.0GHz Dual-Core Processor ($67.53 @ NCIX US)
Motherboard: ASRock B75M-DGS Micro ATX LGA1155 Motherboard ($61.97 @ Newegg)
Memory: G.Skill Ripjaws Series 8GB (2 x 4GB) DDR3-1600 Memory ($38.98 @ Outlet PC)
Storage: Seagate Barracuda 1TB 3.5" 7200RPM Internal Hard Drive ($67.99 @ NCIX US)
Video Card: Gigabyte Radeon HD 7850 1GB Video Card ($174.99 @ Newegg)
Case: Fractal Design Core 1000 MicroATX Mini Tower Case ($39.99 @ Amazon)
Power Supply: Corsair Builder 430W 80 PLUS Bronze Certified ATX12V Power Supply ($35.99 @ Newegg)
Optical Drive: Lite-On iHOS104-06 Blu-Ray/DVD/CD Drive ($24.99 @ Newegg)
Total: $512.43
(Prices include shipping, taxes, and discounts when available.)
(Generated by PCPartPicker 2012-12-14 06:14 EST-0500)

the 6770 won't be enough for games at 1920*1080..you won't need any special graphics card or blueray drives..

edit: get the asrock h77m motherboard if you can afford to go a bit over your budget..the case i included is a mini tower..i don't know any good htpc cases..

Awesome! Thank you!

You are welcome  

Hi.

I'm just going ot leave this here.

It's the improved version of the build nix327 gave you.

PCPartPicker part list / Price breakdown by merchant / Benchmarks

CPU: Intel Pentium G860 3.0GHz Dual-Core Processor ($67.53 @ NCIX US)
Motherboard: ASRock H61M-DGS Micro ATX LGA1155 Motherboard ($44.99 @ Amazon)
Memory: Patriot Intel Extreme Master, Limited Ed 8GB (2 x 4GB) DDR3-1866 Memory ($37.99 @ Amazon)
Storage: Seagate Barracuda 1.5TB 3.5" 7200RPM Internal Hard Drive ($69.99 @ Newegg)
Video Card: Sapphire Radeon HD 7870 GHz Edition 2GB Video Card ($194.99 @ Newegg)
Case: NZXT Source 220 ATX Mid Tower Case ($39.99 @ Amazon)
Power Supply: Corsair Builder 430W 80 PLUS Bronze Certified ATX12V Power Supply ($35.99 @ Newegg)
Optical Drive: Lite-On iHOS104-06 Blu-Ray/DVD/CD Drive ($24.99 @ Newegg)
Total: $541.46
(Prices include shipping, taxes, and discounts when available.)
(Generated by PCPartPicker 2012-12-14 14:49 EST-0500)

It uses the same CPU
A motherboard with less features
Its RAM Kit is faster and cheaper
It uses a higher capacity hard drive, a better case and a better power supply
And last but not least its graphics card is a lot faster (about 30%)

I'd go with the first build but try to push for the 2GB version of the HD 7850.

I see the point in going with a cheaper h61 motherboard and getting the 7870..i was leaning more towards the h77 mobo because that will let him upgrade in the future..and you have used the same power supply as i did..why would you go with the faster RAM when neither the motherboard or the cpu supports 1866 RAM.

Even a HD 7770 would provide the grunt he is looking for, the HD 7850 is more than fine. Get a decent motherboard in my opinion. H77 is ideal but B75 is good too.

EDIT: If you were to go with the HD 7870, get the 500W version of that PSU.