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Personally, at that budget, I'd make the following change:
* drop the processor to an Athlon x4 or x3, for about £25 or £50 saving,
* replace the PSU with a 400W corsair for a saving of about £25
* use the money saved to get a more powerful graphic card, like a ATI HD 5770 or NVidia GTX 460 (if you can push that far).
While an Athlon will not perform quite as well as a Phenom II at the same speed, an Athlon + a 5770 will dramatically outperform a Phenom + a 4850, for gaming purposes. It won't be quite as powerful for non-gaming tasks, but will still be very good.
Isn't i3 only dual core?
WOW uses about half a core on my 1055TFrom what I hear Wow is a rather CPU heavy game, but will run perfectly well on a dual core, GTA4 on the other hand basically requires at least a triple core CPU to run. Therefore I would strongly suggest against downgrading to a dualcore, especially when you are planning to get such a good quad core for a mere £110.
hyperthreading doesnt improve performance by much though the way some people go on you would think it doubled a cores performance.Dual core with hyperthreading
There's plenty of reviews around but in general the lack of cache on the Athlons does hurt performance and even when overclocked to PII levels it can still be 10% to 20% slower. Again I would check out some of the reviews of overclock Athlon II's and see what you think.
IMO you should get a Core i3/H55 LGA 1156 setup, faster at stock, overclock better, (again look at the reviews compared to the Athlons) and you can get a full Core i3/H55, 4Gb, Corsair 400 Watt PSU, Seagate 500Gb hard drive, Arctic Cooling Freezer 7 Pro Rev 2, Coolermaster Elite 334 case, Opitcal drive and a Radeon HD5770 for £415 here at OCUK less shipping for so it comes in just £5 over budget.