You will save a huge amount of money going to newegg, it's time to overcome the fear of putting in information online.

Don't forget if something fishy happens, you can always call your credit card company to get it cleared up and/or cancel the card.

DO NOT buy a soundcard unless you have a 5.1 PC speaker system, it's just a waste of money.

DO NOT buy that video card, you can get the Radeon HD 4850 for $100 on neweeg, a MUCH better card.

For cpus, I'd recomend a core2duo, any of em will probaly be great, just find which one fits in your buidget, also be sure your motherboard is compatible.

You can get 4 GB ram for the same price as your 2GB Kingston, go with that.

Don't spend more than $30 for a DVD player.

500 W power supply should be perfectly fine, anything else is overkill unless you plan to SLI or crossfire, or extreme overclocking (which i'm assuming no since you haven't built a comp before).

Don't forget you need an operating system, if you don't have one at home you will have to buy Windows as well (about $100).

NEWEGG has EVERYTHING, buy it from there.

Looked up a few more parts, to save you from that ridiculous DVD drive price.

Here's the PC I'm recommending:

CPU: AMD Phenom II X3 720 ($120)
Graphics: AMD Radeon HD 4850 ($100)
Motherboard: Gigabyte GA-MA770-UD3 [AMD 770 chipset, Socket AM2+] ($75)
4GB DDR2-800 RAM [5-4-4-15 timings] ($48)
640GB HDD ($75)
DVD Drive/Burner ($29)
Case + 500W PSU (~$100?)
Windows Vista OEM ($100)

About $650 for the whole thing, and as I said will play anything you throw at it.

Concerning Windows, you have to choose whether you want 32-bit or 64-bit, or even whether you're going to wait until Windows 7 in which case I would wait until it comes out then get a DirectX11 video card, should be a lot faster at the same price.

I haven't chosen a case as it's a personal thing, but get one with a PSU already in it and remember it's cosmetic so don't go overboard.

Also if you have more money than $650 to throw at it I can suggest some faster parts - Radeon HD4870 or a quad-core Phenom. But only if you need it, if it's just 1600x1200 gaming on High then this'll be great.

This is very very good. Extremely valuable PC that is balanced in such a way that it will last you 3-4 years playing all the latest games if you make sure to switch the GPU after 1.5-2 years.

Seconded. Excellent build. For future proofing, go for a 64 bit version of Windows (there's no reason not to these days) and also see if you can wangle a free upgrade to Windows 7.

I've heard lots of bad things about 64 bit, mainly that a lot of programs don't support it. Is this true? I heard XP 64 bit was terrible because of this. Will Vista or 7 64 bit have the same problems or are they fixed?

There were initially problems aplenty with lack of driver support, but these days you'll be absolutely fine unless you have some really esoteric piece of legacy kit. You won't get the full benefit of a 64 bit processor + a 64 bit OS until more developers start producing 64 bit versions of their programs, but equally you won't be penalised as they'll still run just fine, and 64 bit is the future (man).

Get the 64 bit version of Windows and you won't lose out over the 32 bit version, and you may gain in the future.

If you're willing to spend a bit more, go for this combo: http://www.newegg.com/Product/ComboDealDetails.aspx?ItemList=Combo.216170

You'll also need DDR3 memory, though.

My recommendation comes from here: http://www.vgchartz.com/forum/post.php?id=2440462

It depends on the games he wants to play, the resolution, and the settings.

OP, could you tell us?

I recommend the OP to wait till this xmas for the OnLive machine.
If it works as the manufacters hype it, it will be worth it.

If it doesn't meet the expectations, you can go ahead building your PC, and by that time you will know that it is the right thing to do since onlive service is not worth it, and also the hardware you want will be cheaper. You can have the PC you want right now for less money, or spend the same amount of money on better hardware.

Just wait and grab an icecream! =)

Given the level of compression and latency for the service, even if it lives up to the hype it won't look as good as a 1600x1200 game on Medium. With PCs so cheap these days (a basic desktop is $300, yet a machine that plays games at the settings I just said is $550 inc. OS [HD4670/X2 245/770]). And the subscription will be at a premium that quickly burns the $150 anyway.

With PC hardware, there is always something better right around the corner. The only reason to wait is if you actually want Windows 7. This is the best time in the history of the PC industry for cheap parts that play games on high settings.