This is what I'd spend £1300 on, and I game a LOT
Product Name Qty Price Line Total Thermalright Ultra-120 (Socket 754/939/940/LGA775) Heatsink(£35.24)
Razer DeathAdder Blue 2000dpi High Precision Gaming Mouse - Retail (£52.86)
Gigabyte GA_965P_DS3P (Socket 775) PCI-Express DDR2 Motherboard £88.11)
Intel Core 2 DUO E6300 "LGA775 Allendale" 1.86GHz (1066FSB) - Retail (£117.49)
Samsung SH-W183 18x18 DVD±RW Serial ATA Dual Layer ReWriter (Black) - OEM (£21.14)
Samsung SpinPoint T HD321KJ 320GB SATA-II 16MB Cache - OEM (£56.39)
Scythe S-FLEX 1600RPM Ultra Quiet 120mm Fan - 3/4 pin (£12.87)
Creative X-Fi Xtreme Gamer 7.1 Soundcard - OEM (£46.99)
Antec P180 Advanced Super Midi Tower Case - No PSU (Black) (£81.06)
Corsair HX 520W ATX2.2 Modular SLI Compliant PSU (CMPSU-520HXUK) (£70.49)
Logitech Media Keyboard Elite - Retail (£17.61)
Samsung SM-226BW 22" Widescreen LCD Monitor - Silver/Black (£270.24)
BFG GeForce 8800 GTS OC 640MB GDDR3 HDTV/Dual DVI (PCI-Express) - Retail (£270.24)
GeIL 2GB (2x1GB) PC6400C5 800MHz Value DDR2 Dual Channel Kit (GX22GB6400DC) (£93.99)
Icemat - Black 2nd Edition (£19.62)
SpeedLink Medusa SL-8793 5.1 ProGamer Edition (£41.11)
Sub Total : £1,102.51
Shipping : £54.95
Vat : £202.56
Total : £1,360.02
-£60 can come from when the CPUs drop in price, or by choosing a cheaper case, dropping down to the S3 version of the motherboard or getting the 20" version of the moniter. Or you could shop around a little.