The Components
GPU
GeForce 8800 GT (EVGA) $249.99 Zipzoomfly

While Intel and AMD would certainly argue differently, in our opinion the GPU is definitely the most important component you’ll need in order to have a good gaming experience. It’s the GPU that connects you to the world you’re gaming in, as it’s responsible for handling all the visuals you see on your monitor. Now certainly if you’re gaming at a very low resolution like 800x600 or 1024x768 the CPU plays more of a role in game performance, but we’re going to assume that most of you game at a screen resolution of at least 1280x1024, and most of you also know to turn on extra eye candy features like anti-aliasing (AA) and anisotropic filtering (AF), which result in crisper visuals and sharper textures. As you crank up the screen resolution and the game’s visual settings, the burden increasingly shifts from the CPU to the GPU, until you eventually get to the point where it’s all on the GPU. At this point you could be running on a 10GHz Core 2 or Athlon CPU and it wouldn’t matter, as you’re bottlenecked by the GPU.
The GPU of choice in our upgrade article is without a doubt the recently announced GeForce 8800 GT from NVIDIA. This GPU redefines the mainstream graphics segment, delivering levels of performance that were previously only found in graphics cards costing $400 or more. In comparison, the GeForce 8800 GT starts right around $250 for a bone stock 512MB card.
Zipzoomfly sells this GeForce 8800 GT card from EVGA for $249.99 with free shipping but it’s out of stock right now. Most of the online retailers sold out of their inventory of GeForce 8800 GT cards within hours of the GPU’s release, but hopefully they’ll be restocked shortly. EVGA is a great brand, offering goodies like a lifetime warranty and their Step Up trade-in program. We’ve reviewed their cards in the past quite extensively and always liked them.
Keep in mind that NVIDIA is producing all of the early GeForce 8800 GT cards for their board partners like EVGA anyway, so regardless of the brand of card you choose they’re all coming off the same production line. This includes the factory overclocked cards.
Alternatives: Until AMD ships their upcoming RV670 chip, the Radeon HD 3800, there really is no viable alternative to the GeForce 8800 GT that we’d recommend. If you want to save a little money the Radeon X1950 Pro would be an excellent alternative though.
CPU
Athlon 64 X2 4000+ $75.90 Zipzoomfly

For years the CPU was considered the core component in any system, but nowadays that isn’t necessarily the case. 3D graphics cards like NVIDIA’s GeForce series and AMD’s RADEON cards offload graphics duties from the processor, freeing it up to handle other tasks. AGEIA’s physX chip hopes to do the same for game physics.
With that being said however, the CPU still plays a very important role in your system’s overall performance. It’s just that its importance varies depending on how you use your CPU. If you’re a home video buff or spend lots of time in Photoshop tinkering with your photos the CPU is crucial, as it’s responsible for encoding your home movies or applying your Photoshop filters. If you use your PC primarily for browsing the Internet or checking email, the CPU isn’t nearly as important, as it spends most of its time idling waiting for something to do. Since we’re a gaming-oriented site, we’re going to look at things from the perspective of a gamer rather than a video enthusiast, hence why we’re allocating significantly more of our $500 budget towards the GPU and not the CPU.
While they once sold for hundreds of dollars, AMD’s dual-core Athlon 64 X2 CPUs can be found for well under $100. We chose the cheapest dual-core X2 CPU AMD currently builds, the X2 4000+. The 4000+ is built on AMD’s 65-nm manufacturing process and runs at 2.1GHz with 512KB of L2 cache per core.
The X2 4000+ can be found for $75.90 on Zipzoomfly right now with free shipping, which is much cheaper than Newegg’s current price of $100. For whatever reason Newegg is selling the 4000+ at the same price as the 4800+ right now, $99.99.
Alternatives: If you want to go Intel, the Core 2 Duo E4300 would be the CPU we recommend. The E4300 is based on the same architecture as the rest of the Core 2 CPUs, only it runs at 1.8GHz has half the L2 cache (2MB) and runs at a slower FSB (800MHz) and lacks support for virtualization. It’s priced higher than the 4000+, often selling in the $120-$140 range. We’ve included benchmarks with it, as well as the X2 5200+ (which is priced comparably to the E4300) in this article so you can see how these two faster CPUs stack up against the 4000+.