If you were going for an all gaming rig and wanted future expandability, I would do something like this:
Case: Antec 300 - $49
http://www.newegg.com/Product/Produc...82E16811129042
PSU: I haven't seen enough data to recommend one, but plan on ~650w cert 80: ~$60-120.
CPU: E8400 - $164
http://www.newegg.com/Product/Produc...82E16819115037
RAM:OCZ Reaper HZC (4-gigs DDR2) - $109
http://www.newegg.com/Product/Produc...82E16820227289
Mobo: DFI Lanparty Dark (x38 northbridge) - $174
http://www.newegg.com/Product/Produc...82E16813136051
GPU: ATI 4850 - $159
http://www.newegg.com/Product/Produc...82E16814102770
DVD: Samsung Lightscribe DVD-R - $27
http://www.newegg.com/Product/Produc...82E16827151173
HDD: This is really time sensitive, each mfg seems to come out with good and bad series. I'll just arbitrarily say get a 640 gig - 1TB drive for ~$80-$120.
With this combination of parts, you could OC the CPU to ~ 3.8 Ghz on stock cooler. The ram, according to the research I've seen, is the best latency for overclocking with this setup. The ATI 4850 is hands down the best bang for the buck right now. with 1 card you outperform Nvidia's 8800GTX (which was selling at $600 1 year ago). with 2, in CF mode , you can beat their current $450 GTX 280 in most cases, while coming in cheaper at $300. The x38 chipset on the motherboard will supply both 16x PCI-e slots in full 16x mode, whereas the p.* chipsets you are limited to 8x per channel. The more expensive 48x NB set only provides about 1% more performance over the older x38, but costs quite a bit more. I've never really gotten excited about super flashy cases.. a bit too much like ricing a car out. So I would recommend something that is good and sturdy with a great airflow layout and tool-less design.
But if you really are never going to overclock your rig or go multi-GPU setup. I'd make a totally different parts selection, and the price would be closer to $560 rather than $900... probably go quad core too if gaming was not your primary objective.
SnoEclipse is correct, 32bit windows XP caps you are 3.25 GB of RAM.