I've just always been happy with my Intel processors.
The only reason I went with one that high was so that I could upgrade parts without having to upgrade the PSU, for the occasion when a not-suck video card comes out.
I have 3 hdds I use (500 SATA, 500 IDE, and 250 SATA), which I'll keep, they have plenty of space. I never use an optical drive, so I'll keep my older DVD burner. The only reason I would upgrade my case is for the sake of space, because I don't want to spend money on something I don't need.
I'll likely buy what y'all suggested, minus the PSU (If I'm not going to upgrade, mine is fine (Rosewill RP500-2
Would this setup support my old video card? (GeForce 8600 GT, 1GB)