Definitely go with a core2 processor, you can pick up the 65nm quad 6600 for $500, then I'd recommend an 8800GTS for around $400. As for mobo, I favor
the nforce 680i chipset but others around here do not.
For Hard Drives...careful, if you keep the pc next to you I'd stay clear of the seagate baracuda drives as they are pretty loud. If not, the perpendicular technology allows for some serious storage space.
I love me some Dominator XMS2 ram so I'll recommend those as well.
The rest I can't comment on, don't know much about psus, drives, etc. Good luck!