I will recommend this build:
CPU+MB: Intel Core i5-2500 + Biostar TP67B+ @ $386
RAM: Kingston ValueRAM DDR3-1333 CL9 4GB X2 @ $76
GPU: Sapphire HD 6950 2GB Dirt3 @ $379
HDD: Samsung SpinPoint F3 1TB @ $68
Optical Drive: Asus DRW-24B3ST 24X DvDRW SATA @ $36
PSU: FSP Aurum 500W [80 Plus Gold] @ $115
CASE: Antec One Hundred Lite @ $75
Total:
$1135
Optional upgrade: 120GB Intel 320
Series Gen3 SSD @ $308
Since you are using the PC for gaming,there is no need to get
Intel Core i7.
Intel SSD is a bit slow but stable as compared to those
SSD using sandforce controller.
i5 2500 and 2500k price not much difference, since he got the
budget why go for 2500...even he doesn't overclock, but he might
need the performance in future.
For the optional upgrade, the crucial M4/c300 will be a better
choice. High speed and is stable too(non-sandforce). Normal home
users do not really require the enterprise-like features of the 320
SSD.