Okay here's a build that I put up on several posts, so you can decide if this will work for you. It's a good solid build that will game real well, but also do just about anything you throw at it. The prices have changed a bit, so beware, but the prices are pretty close.
Okay here it goes. This will give you plenty of power for now and give you good GPU power for the $.
CPU - $255
Intel Core 2 Quad Q6600 Quad-Core Processor 2.4GHz, 1066FSB, LGA775, 8MB cache Retail ***Free Shipping***
http://www.zipzoomfly.com/jsp/Prod [...] Code=80864
Mobo - $98 - $30 MIR = $68!! One of the best budget p35 mobo's out there.
ABIT IP35-E LGA 775 Intel P35 ATX Intel Motherboard - Retail
http://www.newegg.com/Product/Prod [...] 6813127031
GPU - $277 - $30 MIR = $307!! You can upgrade within 90 days using the "Step Up" program, if you want to get the latest GPU. Limited Lifetime Warranty!
EVGA 512-P3-N841-AR GeForce 8800GTS (G92) 512MB 256-bit GDDR3 PCI Express 2.0 x16 HDCP Ready SLI Supported Video Card - Retail
http://www.newegg.com/Product/Prod [...] 6814130325
PSU - $130 - $20 MIR = $110!!! One of the best PSU's you can get in this price range. Has plenty of connections for your upgrade needs! Has 5 yr. warranty too!
CORSAIR CMPSU-650TX ATX12V / EPS12V 650W Power Supply 100 - 240 V UL, CE, CB, TUV, FCC, CCC - Retail
http://www.newegg.com/Product/Prod [...] 6817139005
Memory - $107 - $15 MIR = $92!! Cheap and fast CAS 4 DDR2. Allows you to upgrade to 8gb's later, if you like.
Patriot Viper 4GB(2 x 2GB) 240-Pin DDR2 SDRAM DDR2 800 (PC2 6400) Dual Channel Kit Desktop Memory - Retail
http://www.newegg.com/Product/Prod [...] 6820220293
HD - $100!! You'll enjoy the extra space. If you need more, just buy more now or just buy another HD later.
Western Digital Caviar SE16 WD5000AAKS 500GB 7200 RPM 16MB Cache SATA 3.0Gb/s Hard Drive - OEM
http://www.newegg.com/Product/Prod [...] 6822136073
DVD Burner - $29 shipped!! This is the retail version, so you can view/burn DVD's, because the software is included!
PHILIPS 2-Tone 20X DVD+R 8X DVD+RW 8X DVD+R DL 20X DVD-R 6X DVD-RW 12X DVD-RAM 16X DVD-ROM 48X CD-R 24X CD-RW 48X CD-ROM 2MB Cache SATA 20X DVD±R DVD Burner - Retail
http://www.newegg.com/Product/Prod [...] 6827248008
Case - $57 shipped! One of the better budget cases out there. Currently there aren't any really good steals, so this is what I found. I'd go for a Antec 900 or Cooler Master 690 case, if they were on sale. They usually are around $60-70 when they are on sale, so consider those when they hit the sales rack!
COOLER MASTER CAC-T05-UB Centurion 5 Mid Tower Case (Blue) Retail
http://www.zipzoomfly.com/jsp/Prod [...] ode=141783
Total ~$1,038 - $95 MIR's = $943!!! Not bad for under $1k. You can obviously find better deals if you go hunting for them, but these are from reputable online vendors, so take that into consideration. Newegg seems to have the best customer service, but doesn't always have a good price on things, so shop around before you purchase.