Ok taking into account everything you have said this is what i have come up with.
Dell Ultrasharp 2407WFP 24" Widescreen LCD Monitor - Midnight Grey
Microsoft Windows Vista Home Premium 64-Bit Edition DVD - OEM
Intel Core 2 Duo E6850 "LGA775 Conroe" 3.00GHz (1333FSB)
Tuniq Tower 120 CPU Cooler (Socket 478/754/939/940/AM2/LGA775)
Abit IP35 Pro (Socket 775) PCI-Express DDR2 Motherboard
G.Skill 2GB DDR2 HZ PC2-6400C4 (2x1GB) CAS4 Dual Channel Kit
X2
Western Digital Caviar SE16 320GB 3200AAKS SATA-II 16MB Cache
X2
BFG GeForce 8800 GTX OC 768MB GDDR3 HDTV/Dual DVI (PCI-Express)
Creative Sound Blaster X-Fi Xtreme Music 7.1 Soundcard
Samsung SH-183LBEBN 18x18 DVD±RW Dual Layer Serial ATA Lightscribe
Seasonic M12 Modular 600W Silent ATX2.0 Power Supply
Akasa Eclipse 62 Aluminium Case - No PSU
Total : £1,776.99
Right the Dell Ultrasharp Monitor is a fantastic screen, it looks amazing and the image quality is superb. Well worth the money.
I have chosen the Intel Core 2 Duo E6850 because at stock it is rated at 3GHZ which is pretty fast anyway. So you can leave it at stock and games will still fly. If you do want that extra performance out of the processor you wont have any problems overclocking it. Im guessing this will be your first time overclocking but no need to worry, have a read of this, that should tell you the basics of overclocking. How ever if you do have any more questions theirs plenty of people here that are willing to help.
The Tuniq Tower is a superb cooler and will keep that chip of yours nice and cool. At stock and when overclocked.
The Abit IP35 Pro motherboard is a fantastic board. Its one of the newer P35 chipsets which will support Intels upcoming 45nm processors, the Penryn Family. The board it self is extremely reliable and has great overclocking potential. You wont have any problems with it.
The Gelli Skill HZ is fantastic Memory. At stock its rated at 800MHZ, so really it will be plenty faster enough even if you dont overclock it. Though if you do overclock it, it should hit 1000MHZ and above quite easily.
I have put 4GB in for you (4 x 1GB sticks) so you will need a 64bit O/S which i have included for you, Vista Home Premium. Their are problems running 4 sticks of memory with certain chipset motherboards but these issues are resolved on the new P35 boards so no need to worry about that.
The Western Digital Hard Drives are fantastic drives, very reliable and quite. I have put in 2, 320GB drives for you because you could maybe dual boot Windows XP and Vista. Put XP on one Hard Drive and Vista on the other. So try Vista out and if everything runs fine thats great. If you do experience any problems just boot into XP. Hopefully in a few months most of the issues that users are experiencing with Vista will be resolved. Either way you haven't lost anything since eventually Vista will be the main O/S.
Is everyone still with me, nearly finished.
Now the 8800 GTX is a monstrous card and should go perfectly with the Dell 24inch Monitor. Nothing more to say about the card.
I have also put in a Sound Card for you which will be great if you have some kind of surround sound system. Even if you don't it will be much better than onboard sound.
The Samsung drive connects to your motherboard via SATA which means you can cancel the IDE controller on your motherboard which will help with quicker boot times. Most of all though cable management will be easier and you can get rid of them ugly, big, fat, chunky, horrible IDE cables.
Seasonic are one of the best manufacturers around when it comes to PSUs. The M12 Modular 600W Silent is very quite and extremely reliable. 600 Watts is plenty of power for this system and will be enough for any future upgrades.
The Akasa Eclipse is a fantastic case. Great build quality and fantastic air flow.
Well i hope i haven't bored everyone to death but thats my view.