I only want to upgrade the mobo, videocard, and processor. I am hoping for 600 for all of it. I assume that my ram will not work in a new mobo. What I'd like to stress is not a short term goal, but that it will be upgradable as much as possible for the future. (I'll be with this mobo for 3-4 years probably).
If you want to build a PC that really is upgradable over the next 3 or 4 years, then you should wait until either Conroe or AM2 comes out.
Intel's new CPU Conroe is expected to be on sale in July. It is socket LGA775 just like current Pentium 4s, but it may not be compatible with the 975X chipset. You'll need to wait for either the 965 or 975XBX chipset to ensure 100% compatiblity.
Socket AM2 is AMD's next series of Athlon 64 coming out on May 23rd. It will offer 0% - 5% increase in performance for the current generation of S939 Athlon 64 at best. It also add DDR2 RAM. The purpose of AM2 is to lay the ground works for AMD's next CPU, the K8L which is coming out next year. S939 CPUs are slated to end production at the end of this year.
You can upgrade to a S939 Athlon 64 now, but you will not be able to upgrade to the K8L CPU. Also, once S939 production ends, AMD may raise prices of S939 CPU, to encourage more people to switch to socket AM2. They raised the prices of Athlon XP to encourage people to move to S754. By the beginning of 2008 I would expect new S939 CPUs to be pretty scarce.
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It would be cheaper to play Oblivion on XboX 360, but you will miss out on community created mods. I think mods are what really made Morrowind so popular.
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If you were to build a system now with that $600 for CPU, mobo, RAM & GPU it would be very tight. If $600 (before shipping) is all that I could afford then I would get the following components:
ASRock 939Dual-SATA2 - $67
Asrock is the budget division of Asus. This is a rather interesting mobo with lots of good feature and a path to upgrade in the future. First, it has both AGP and PCI-e ports and the ULi 1695 chipset allows an AGP card to perform at least at 95% compared to a mobo dedicated for an AGP card. But you are adding in a PCI-e card anyway so I won't get into too much details, but you can use both AGP and PCI-e cards at the same time for 2 different monitors. The AGP for surfing the net or something else, and the PCI-e for playing Oblivion. Second, and more important, this mobo is compatible with AM2 CPUs and DDR2 RAM if Asrock does actually release and expansion card.
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Here's a review of the mobo.
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AMD Athlon 64 3200+ - $154
CORSAIR ValueSelect 1GB (2 x 512MB) - $77
So far that adds up to a little less than $300. Your next decision is the graphics card, for which you have $300 in your budget. The Radeon performs better than the nVidia. There are benchmarks that fact. However, you have a problem, ATI card are very power hungry, almost double that of a competing nVidia card when both cards are not overclocked.
SAPPHIRE Radeon X1800XT - $299 this is OEM - Power Consumption = 103w
XFX Geforce GeForce 7900 GT - $299 - Power Consumption = 52w if not overclocked.
The 7900GT is an update of the 7800GT and performs slightly better than the 7800GTX. Because it is shrunk from 110nm die down to 90nm die, it also uses less power, about 5w - 8w but I can't remember exactly were I read it.
GPU Power Consumption
Go for either card, but realise that if you have a weak power supply then you will need to upgrade that.
CPU Power Consumption
Assume the following setup:
Athlon 64 3200+...................................40w (estimate & not overclocked)
Motherboard.........................................20w
RAM (2 sticks)......................................10w
Hard Drive (1)......................................16w
Sound Card..........................................10w
DVD Drive............................................16w
Fans (2)...............................................10w
Total Estimate Power Consumption........122w
This is based on 100% load assuming all your components are stressed at the same time, which doesn't happen even when playing a game because your hard drive and DVD drive will not be spinning all the time.
This leads to the video card:
Radeon X1800.....................................103w (actual)
nVidia 7900GT (stock speed)..................52w (estimate)
nVidia 7900GT (overclocked)..................82w (estimate)
Most 7900GTs are overclocked when sold, the extra 30w is merely a guess. This puts a potential 100% load of 204w to 225w.
Is your power supply (PSU) able to running this updated system? That depends. Almost all power is drawn from the 12v rail in newer systems so you need to check your PSU to make sure it gets at least 20 amps on the 12v rail. There is a sticker on the PSU that will tell you the amps, but you may need to remove from your PC.
If you do not have at least 20 amps then you will most likely need a new PSU.