Based on everything I've discovered while working on my build... I'd say intel is the way to go. Something like this.... maybe the veterans can say for sure, but for $40 more (or a couple dollars if microcenter is near)... seems to be more bang for your buck.
The Phenom II is old news. You want an i5 if at all possible as it will perform infinity times better. If you are trying to cut corners maybe go down to an AMD FX-6300, but honest an i5 will do you the best and give your system longevity. You will be able to use an i5 longer than a Phenom II, which has already been out for years. Don't buy into old tech when it comes to a new computer.
Eyeage it pretty dead on with his build. The power supply is a bit overkill, HOWEVER, for that price it's a great deal and you get a really solid PSU that will last you years and years through upgrades and builds. I bought a good PSU like 6 years ago and it's seen many of new components. I'd say the AMD 7850 is a decent gaming card, and definitly one of the best gangs for your buck. The 7870 in eyeage's build is a step up for only a few dollars more. I'd consider a GTX660 myself and is always what I shoot for at your price range. Though I'm bias towards Nvidia as of late, the AMD alternatives are just as good in that range.
I did see your original build had a 3TB drive. Is that necessary? You can save quite a bit by just getting a good 1TB drive. I love the Samsung F3 7200RPM drives. They are by far one of the most reliable and only slightly slower than a WD Black drive.
I would stay away from Lite-On optical drives, I've seen so many of these die on people. ASUS makes a good drive, or Samsung, or Sony, and a few others. Thought a DVD Burner really isn't a costly replacement if you had to do it.
BTW, what is with the super tiny LCD? I would suggest spending a small amount extra to get a 22 or 23" display. ASUS makes a good display at a decent price. Newegg ALWAYS has deals on these with instant savings and codes and MIR's. Here is a 23" with all 3. http://www.newegg.com/Product/Product.aspx?Item=N82E168...