Would something like a Celeron E3300 work well? They are fairly inexpensive. That seemed to be the choice before the i3 came out.
Unless you go used, this is probably the cheapest you can go for LGA-775:
- MB: Foxconn G41MXE, $45
- CPU: Intel Celeron E3400 2.6GHz, $50
- GPU: HD 4550/5450, ~$35 ($20 AR)
- TOTAL: $130
The Athlon II X2 + 880G costs $118 or $12 cheaper. However, you do get a stronger GPU with the LGA-775 option along with 7.1 LPCM output (HD 4550 & HD 5450) and HD audio bitstreaming (HD 5450 only). The Celeron is slower than the Athlon II X2, though. Even if it's a Wolfdale, having only 1MB L2 cache really holds back its performance.
Another thing, there are a lot nicer inexpensive upgrade options for AM3 compared to LGA-775. With AM3, you can go up to a Phenom II X4 or X6 in case you ever need more CPU power. With LGA-775, it's hard enough finding a used Yorkfield for a reasonable price. Brand new? Forget it.