BTW If you go the AM2 route it ends up being a little bit cheaper. It shouldn't be a bad system at all. When I first built my main computer the specs were almost identical (slower proc) and it handled most things just fine. Heck mine even managed Vista just fine. As long as you make the page file super big you shouldn't have too many problems with it either.

AMD Sempron 3000 & ECS Mobo w/ integrated 6150 video--$70
512mb PQI Turbo DDR2 800--$16