Ooohh I'm on the wrong PC, but I just setup a great $1k PC gaming rig at newegg a week ago. Here's some basics that I came up with:
Intel Core 2 Duo E6750 Conroe 2.66GHz LGA 775 Processor
LinkGIGABYTE GA-P35-DS3L LGA 775 Intel P35 ATX Intel Motherboard
LinkRosewill RP550-2 ATX12V v2.01 550W Power Supply
LinkFor memory, look for a matched set of DDR2 800 sticks with CAS latancy of 4. Here's an example:
G.SKILL 2GB (2 x 1GB) 240-Pin DDR2 SDRAM DDR2 800 (PC2 6400)
LinkBut read some reviews and guess accordingly.
Total for the above parts (before any rebates) would be $595. Just add on a case you like, HD, DVD-RW, and whatever else. I'd think over the video card thing too. The 8600GT is probably the best bang/buck right now or maybe an ATI X1950 PRO, like this one:
POWERCOLOR X1950PRO512MBAC Radeon X1950PRO 512MB 256-bit GDDR3 PCI Express x16
LinkThey run around the same cost. The 8600GT is DX 10, while the X1950 is DX9, and they get fairly similar performance. Neither really blows away your 7600GT, but they both offer a decent boost. If you wanna drop an extra $100 or so, then you could look at the 8800GTS cards - specifically the 320MB memory versions, but I dont know if they really are worth it at this point. Toms hardware also recommends the ATI 3850, but I dont know much about that card.