Looking to Buy New Computer
Between CPU's I would probably go with Intel even through AMD seems to provide better bang for buck but since you want a system to last and be upgradable in the future I would go with Intel and get a Core 2 Duo and upgrade to Intel quad core processor later once more applications or games utilizle this. The only game I know of that utilizies quad core is Supreme Commander. Another plus is Core 2 Duo and Quad use the same socket LGA775.
Intel Core 2 Duo E8400 3 GHz Dual Core Processor (1333 MHz ) Socket 775 (6 MB L2 Cache) - Box BX80570E8400
http://www.pcvonline.com/productDetails.aspx?id=6564
$194.95
There are many choices for motherboards and I use to lean more towards Gigabyte but I'm quite impressed with what ASUS has to offer nowadays. This board here should suit all your SATA needs and even has integrated Wifi and you can easily overclock the E8400 CPU from 3Ghz to 3.6Ghz using the stock Intel cooler although I don't suggest this. I will suggest what you can get for an aftermarket CPU cooler further down.
Asus P5K-Premium WiFi-AP Socket 775 Intel P35 ICH9R Chipset Dual-Channel DDR2 1066/800/667Mhz Dual GigaLAN 2x PCIe x16 eSATA/SATA 3.0Gb/s Firewire 10x USB 2.0
http://www.canadacomputers.com/index.php?do=ShowProduct&cmd=pd&pid=015456&cid=MB.157
$167.99
As for ram for can either get DDR2 800 or DDR2 1066. Also note that if you are running the regular 32bit version of XP your system will only recognize 3GB out of the 4GB of available ram. You are probably best to run Vista Ultimate 64bit to take advantage of DirectX 10 for gaming anyways. DDR2 800 is about $50-60 cheaper then 1066. Besides if you plan on overclocking the CPU a little bit it can be easily done with good quality DDR2 800.
OCZ (OCZ2RPR8004GK) DDR2 PC2-6400 800 MHz Reaper HPC Edition 4GB Dual Channel
http://www.canadacomputers.com/index.php?do=ShowProduct&cmd=pd&pid=018764&cid=RAM.346.307
$82.99 after $30 mail in rebate
For the hard drive there are two options I would go with. The first one is the Samsung Spinpoint F1 Series 750 gig 32M cache drive. I think this drive give you best bang for buck as well as being 7200rpm and 32M cache it is a good choice.
http://www.pcvonline.com/productDetails.aspx?id=7188
$109.95
The other alternative is the Western Digital Caviar (WD6400AAKS) 640GB SATAII 7200RPM 16MB Buffer (OEM). It is an odd size because of the plater size western digital decided to go with. From some reviews I read online this drive performs very fast and close to the raptor series drives which is 10,000rpm.
http://www.canadacomputers.com/index.php?do=ShowProduct&cmd=pd&pid=018205&cid=HD.443.877
$94.99
Now choosing a video card can be very subjective and everyone is going to have their own opinion. I will recommend what I think will give you the best value and most for your dollar in terms of longevity and performance. I think right now is a great time to pick up a decent Nvidia card because Nvidia just introduced their new GTX280 chipset a few weeks ago. Next month is when all the new video cards are coming out so there are lots of mail in rebates available from many companies.
I like the BFG GeForce 8800GT OC nVidia GeForce 8800GT Chipset (625Mhz) 512MB (1800Mhz) GDDR3 Dual Dual-Link DVI PCI-Express 2.0 Graphics Card because it does not use a dual slot type cooler and it operates pretty silent compared to some ATI cards I've heard in the past when they are under 100% load.
http://www.canadacomputers.com/index.php?do=ShowProduct&cmd=pd&pid=016647&cid=999.243.390
$154.99 after $40 mail in rebate
Another video card worth considering is the XFX GeForce 9800GTX 675MHZ 512MB 2.2GHZ GDDR3 PCI-E Dual DVI-I HDCP HDTV Out Video Card. Keep in mind this card and most GTX cards are very big and long. It also takes up an extra slot too because of the cooler on it.
http://www.ncix.com/products/index.php?sku=29217&vpn=PVT98FYDF9&manufacture=XFX&promoid=1060
$185.99 after $20 mail in rebate
Now depending on your preference for a case I believe the Antec Sonata III Quiet Super Mid Tower w/ 500W PSU Metallic Charcoal Color (Canada Computers Exclusive) is your best choice. You get a very good quality built case and an Antec 500W power supply as well.
http://www.canadacomputers.com/index.php?do=ShowProduct&cmd=pd&pid=016276&cid=CS.664
$99.99
Most people buy a case and power supply seperately but this ends of costing more. From what you wrote you do not seem like a hardcore gamer so a dual SLI or crossfire setup is not in question here so the 500W power supply that comes with this case is more then enough for all your needs. But in case you are curious and want to go that other route here is what I would recommend.
The popular gamer's choice for case from what I have read is the Antec Nine Hundred Black Steel ATX Mid Tower Ultimate Gamer Case. It's the same price at the case listed above except no power supply.
http://www.canadacomputers.com/index.php?do=ShowProduct&cmd=pd&pid=011391&cid=CS.664
$99.99
Now since we need to purchase a power supply seperately we will get something a bit more powerful then 500watts such as Antec TPQ-850 850W ATX EPS12V 80mm Fan 80PLUS RoHS Power Supply.
http://www.canadacomputers.com/index.php?do=ShowProduct&cmd=pd&pid=014263&cid=PS.808
$185.99
See how much more the adds to the cost of a system? 850watts might be overkill for your application but just to give you an idea. Again I would get the Sonata III and when the 500 watt power supply eventually dies after a few years you can replace it with a better one.
Now lastly, the CPU fan. The stock cooler that comes from Intel works just fine but from reviews and benchmarks after market fans run the CPU almost 5-8 degrees cooler. Personally I think the XIGMATEK HDT-S1283 CPU Cooler for Intel Socket 775 & AMD Socket AM2/939/940/754 provides you will excellent cooling and is very cheap compared to some of the best aftermarket coolers our there.
http://www.canadacomputers.com/index.php?do=ShowProduct&cmd=pd&pid=018142&cid=FN.349
$34.99
Here is a comparison of what the XIGMATEK (left)cpu coolers looks like compared to the stock Intel (right) cooler.
http://www.canadacomputers.com/ProductImages//33812.jpg
http://www.canadacomputers.com/ProductImages//256.jpg
The king of all coolers is the Thermalright U-120E Ultra-120 eXtreme (Ultra-120). It is around $55-60 and does not include a fan which could run you an extra $25 on top. From some overclocking forums some people have been able to overclock the E8400 from 3Ghz to 4.2Ghz using this.
Now you can understand my point about the XIGMATEK being the best bang for buck since you get a good quality heatsink and fan bundled. If you do do with aftermarket cpu cooler don't forget to pickup a tube of of Arctic Silver 5 High-Density Polysynthetic Silver Thermal Compound.
http://www.canadacomputers.com/index.php?do=ShowProduct&cmd=pd&pid=003060&cid=FN.687
$7.83.
So in summary you shopping list should look like this:
Intel Core 2 Duo E8400 3 GHz Dual Core Processor (1333 MHz ) Socket 775 (6 MB L2 Cache) - Box BX80570E8400 $194.95
XIGMATEK HDT-S1283 CPU Cooler for Intel Socket 775 & AMD Socket AM2/939/940/754 $34.99
Asus P5K Premium /Wifi-AP Motherboard ---- Socket 775, Intel P35/ICH9R , 4XDDR2, 2XPCI-E 16 $167.99
OCZ Reaper Hpc Edition PC2-8500 DDR2 4GB 2X2GB DDR2-1066 CL5-5-5-15 Dual Channel EPP Memory Kit - OCZ2RPR10664GK $82.99
Samsung Spinpoint F1 Series 750G 32M SATA Hard Drive --HD753LJ $109.95
BFG GeForce 8800GT OC nVidia GeForce 8800GT Chipset (625Mhz) 512MB (1800Mhz) GDDR3 Dual Dual-Link DVI PCI-Express 2.0 Graphics Card $154.99
Artic Silver $7.83
Antec Sonata III Quiet Super Mid Tower w/ 500W PSU Metallic Charcoal Color $99.99
Subtotal $853.68
PST $68.29
GST $42.68
TOTAL $964.66
or if you go with the Western Digital 640GB hard drive then
Intel Core 2 Duo E8400 3 GHz Dual Core Processor (1333 MHz ) Socket 775 (6 MB L2 Cache) - Box BX80570E8400 $194.95
XIGMATEK HDT-S1283 CPU Cooler for Intel Socket 775 & AMD Socket AM2/939/940/754 $34.99
Asus P5K Premium /Wifi-AP Motherboard ---- Socket 775, Intel P35/ICH9R , 4XDDR2, 2XPCI-E 16 $167.99
OCZ Reaper Hpc Edition PC2-8500 DDR2 4GB 2X2GB DDR2-1066 CL5-5-5-15 Dual Channel EPP Memory Kit - OCZ2RPR10664GK $82.99
Western Digital Caviar (WD6400AAKS) 640GB SATAII 7200RPM 16MB Buffer (OEM) $94.99
BFG GeForce 8800GT OC nVidia GeForce 8800GT Chipset (625Mhz) 512MB (1800Mhz) GDDR3 Dual Dual-Link DVI PCI-Express 2.0 Graphics Card $154.99
Artic Silver $7.89
Antec Sonata III Quiet Super Mid Tower w/ 500W PSU Metallic Charcoal Color $99.99
Subtotal $838.78
PST $67.10
GST $41.94
TOTAL $947.82
The links I provide are the cheapeat I could find at the moment. Feel free to PM me if you have any questions and hope this helps you. Good luck.