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The HD 4870 outperforms the GTX 260 in most tests, but for a little bit more you can get a GTX 260 CORE 216 which beats both.
As for the PSU, you can get a superior COOLER MASTER Real Power Pro 650W for the same price. The only difference is that it has more amperage on the +12V rails (total). The COOLER MASTER Real Power Pro 750W PSU sells for the same price right now on newegg (after rebate $79.99). With this PSU you are ready for SLI if you ever go that route. The E8400 is your best bet for a CPU, it overclocks like a champ. At 3.6 ghz with 1.350V core (1.4V FSB), my E8400 runs very stable and the heat is the same as it was stock. G.SKILL memory is generally not recommended. I have some myself, G.SKILL themselves say they aren't good for overclocking. I agree with that XIGMATEK CPU cooler that was recommended, tests show it is a very effective and the price is unbeatable.
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