After a load of research and pricing, this is what I've come up with:
CPU: i5 3330 Ivy Bridge 3.0 gHz
GPU: Sapphire Radeon HD 7850 1 GB --- Coolmaster Hyper 212 Evo heatsink
MoBo: Gigabyte GA-Z77x-UD3H
SSD: Kingston Hyperx 90GB
RAM: G-skill ripjaws series 2x4 gb
PSU: Seasonic G-series 550W
Optics: Asus 24x dvd burner
Case: Rosewill Challenger
I would like to be able to play some higher end games and keep up with future games, but not necessarily at uber top end frame-rates. I also don't want to go overboard. My biggest question would be on the motherboard, what are you paying for? Durability? performance? fancy name? Also, is an i3 going to bottleneck the graphics card, or is the i5 too much? I would like this build to be relevant for more than a few years, possibly given HTPC duties, and still give me a good experience with games at an average/above average graphics setting. Oh, and for under a grand.
Don't buy a 1GB graphics card, go with the 2GB version (that's a must nowadays);
Hyper 212 EVO doesn't go in the graphics card... It's for the CPU (sure it was just a mistake);
You would be fine with the i3 (I would go for the higher possible i3);
Also, have you looked at AMD CPU's? They are good, belive me, get hands on a FX 8350 (same price as the i5 you picked) and it OC's like crazy!