Don't overclock. You don't want to worry about stability. The power supply is not that important, 600W is overkill - I have a 6000+ and an X1950PRO on a 500W and it's fine and that'll be way more power hungry than a 5400+ and an HD2600XT. As for the 8600GT he mentioned, HD2600XT is the same performance, but cheaper and with a better video pathway. As for Intel processors, AMD is cheaper in your price range unless you overclock which is unnecessary. Gaming and video will be fine with my build and it's far cheaper than you suggestion and better because games are heavily video-card dependent.
Ubuntu. Linux for human beings.
If you are interested in trying Ubuntu or Linux in general, PM me and I will answer your questions and help you install it if you wish.
