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Let's look at Intel, but make some improvements and stay in budget.
Case: Fine.
PSU: Nope. XClio 450BL. 40 bucks cheaper and plenty good.
Motherboard: Fine.
CPU: Nope. Pentium-D 915 or 925.
Ram: Nope. 1 gig Corsair Value Select dual channel kit DDR2-667.
Video card: Fine.
Heatsink: Not necessary with retail boxed processor.
If you can toss another 75 bucks or so at it, you can get a Core 2 Duo E6300.
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