Okay... I've been researching PC building pretty heavily recently, and here's what I'd recommend.
Generally, after the $800 mark or so, you're going to run into heavy diminishing returns on your home-built PC. Keep this in mind as you're selecting your parts. If you spend $800 now and another $800 two years down the road for upgrades, you'll be spending much less than the guy who springs for a $3000 Uberbox and keeps it for 4-5 years without upgrading, with maybe slightly less performance.
With that in mind, here's what you should do.
CPU: Quad-core processors, as it currently stands, barely have any advantages over a tri-core in terms of performance. (Certain games may list a quad-core under their "recommended" specs, but in most performance tests quad-cores only barely beat out tri-cores.) In addition, AMD has Intel beat by a mile in terms of price:performance ratio. The best "bang for your buck," therefore, will be an AMD tri-core. The Athlon X3 435 (2.9 GHz triple-core) will let you run modern games for a few years at insanely good framerates, and it's under $100 on Newegg.
MOBO: I recommend the GIGABYTE GA-MA770T-UD3P. Packed with features, incredibly expandable reliable, and - again - under $100.
RAM: DDR3 is basically the new de-facto standard, and it's only slightly more expensive than DDR2. Get thee 4GB of DDR3 1333 RAM - anything with a higher speed is a waste of money.
GRAPHICS: ATI currently has the best price:performance ratio of the two major manufacturers, unless you're REALLY interested in the PhysX gimmick. A Radeon 4770 or 4850 should allow you to display modern games at insane framerates for the next few years at your monitor's resolution. I'd use something like this XFX HD-477A-YDFC Radeon HD 4770 512MB. But if you're still dead-set on NVIDIA, just know that - where graphics cards are concerned - anything over the $130-$140 mark is a terrible waste of money.
HDD: You'll want at least a 500GB one, for obvious reasons. Just grab whichever one has high ratings and a reasonable price on Newegg.
CASE: The standard "cheap-but-effective" case seems to be the COOLER MASTER Centurion 5. I really wouldn't recommend going any more expensive than that unless you absolutely need a whisper-quiet system.
PSU: Contrary to somewhat widespread belief, a good 500-550W PSU is all you'll need for all but the most powerful (read: that $3000 Uberbox) gaming PC. I recommend the Antec BP550 for both value and effectiveness.
COOLING: Not terribly familiar with this one, but I've heard several people on other forums recommend the Sunbeam CR-CCTF.
And there you have it. :)