Ok, with $700 I'd say build a machine you can use now while you save up for a good GFX card. I'd also suggest starting all over, with a fresh new case and the like.
Mobo- I'd say get one of the new Geforce 6100 mobo's, It has integrated GFX that are as good or better than my Radeon 9200, and I get playable (30-60) framerates at med to low setting is all games. (well havn't tried FEAR yet tho..) Most people don't seem to like Microboards w/ integrated GFX, but there's not really a disadvantage unless you're looking for major expandability or overclocking. Nvidia's G6100 boards are sopposedly doing very well. I just bought one for a friend to play games till he can get a better GFX card, so I think it's a good way to build a budget comp.
I'd suggest this board, it's actually sopposed to have really good OC'ing (overclocking) features.
Biostar s939 G6100 Tforce
The down side to that board is that it only have 2 SATA ports and a megabit lan port instead of a gigabit lan port.
Basicly if you want more than 2 hard drives or really fast speeds when transfering files over a network (gigabit ports don't really help unless you have everything on your router at gigabit speeds, which is unlikely)
If yes, get this board, it also has better sound.
Gigabyte G6100 mobo
Processor- Here's why you should skip out on a top notch GFX card for now, get a dual core processor now and it will last a long time.
I'd suggest getting a regular Athlon x2 3800
Athlon x2 3800
But the Dual core Opteron 165 is a bit cheaper right now...
There's little out of the box performance difference, but I'd suggest the 3800 because it's more geared to mainstream people.
RAM- I'd say go with a single 1gb stick, so that when upgrading you can just pop another 1gig stick in easy.
Corsair Value 1gb
Hard Drive- Cheapest, 100gb SATA from good brand
Maxtor 100GB SATA HD
You could probably rip one out of your old system, since floppys are rarely used.
Case- Aspire X-Plorer
Comes in a couple more colors, so check it out. Strangely the yellow one is on sale.
PSU- Forton 450watt
That's about $695 (not including shipping or the floppy drive)
You'll also want to buy a legal version of windows XP
An OEM version can be about $80-90 for home.
XP home OEM
So it jumps a bit over after adding windows.
I'd say go for that, and you can use the onboard video while you save up for a 6800GS
or better yet a 7800GT
Like I said, I'm not a pro, but I think it's a good way to get a good PC and get it running and then get it really good when the rest of the money's there. Hope that helped a little.