At some point in the last few years, I've replaced every component on a PC.
This will be the first time I've ever started one from scratch though. The building isn't actually much of a concern but what do you think of the specification I've come up with. With my budget being £500, this comes in at just under by pennies, although I got all my prices from eBuyer and would look elsewhere before buying.
Mobo Asus M5A78L/USB3
CPU AMD FX-4100
GPU ATi HD7770
Case CiT Vantage Gaming
DVD/CD Samsung SH-224BB
HDD Seagate 1TB Barracuda SATA III
PSU Corsair TX 650W
RAM Crucial 8GB DDR3 1333Mhz Ballistix (2x4GB)
OS Windows 7 Home Premium 64-bit
You are definitely on the right track, but I reckon you can get more for your money. Also, you never specified usage which makes it hard to push you in the right direction.
Firstly, I'd say you can do better in terms of the processor. If you are set on AMD that's fine, but the 4100 is from the older product line. While it might be a little more expensive, a 4300 is likely to be a better investment, and frankly given the fairly small price difference I'd be inclined to go for the 6300.
Here's a variant on your build for roughly the same price. (I went over at the end because I forgot the optical drive). More or less everything is a little better than what you had, though the graphics card remains the same. If your focus is gaming you might want to consider shuffling the budget towards the GPU, it's where you are going to see the returns. Additionally, I allowed money for a solid CPU cooler. A lot of the "bonus" value in AMD CPUs is the fact they are overclockable, so I covered that facility.