Soleron said:
If those are the most intensive games you're playing, you definitely don't need the i7 860 (because it is fast but expensive, ~$300).
A sub-$100 CPU like the Athlon II X3 445 or the Pentium G6950 would be better choices and you save $200 with little performance difference.
What's your choice of graphics card? That matters more than the CPU.
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At this stage I am thinking a Nvidia GTX 260 with 1792MB or if I can't afford it a GTS 240 with one GB.
The problem is, it is a family computer that will be required to do everything the family wants for the next three years or so. While that will be nothing TOO intensive, it does need to hold up well over those three years, and I feel like if it's a choice I should maybe encourage the faster processor over the better GPU, because the processor is likely to be used more by the programs they will run...