Here's a much tighter build:
CPU: Core i3-2100 $125. This chip is beastly compared to AMD chips cost-for-cost. Excellent price point for gamers. The money you save from buying a 2500k can be put towards a better graphics card.
Mobo: Asus Z68-V Pro $190. good headroom for the future, and it's always best to have a solid motherboard; it's the backbone of your system after all. Also, comes with intel ssd smart cache.
RAM: Corsair XMS3 DDR3 4GB (2x2GB) 1333mhz RAM $40. Cheap, reliable, and you won't notice a performance difference honestly. If anything, huge ram heatsinks just crowd your board.
HDD: Western digital Caviar Green 1 TB $50. Good performance for the price. More importantly though...
SSD: OCZ Solid 3 60GB SATA III SSD $125. The money you save from downgrading your CPU, RAM, and HDD go into the other backbone of your system - the bottleneck that the HDD creates. Comparable performance to the Intel SSD, but half the price. With the SSD cache feature of the Z68 board, size is not as important since your SSD is essentially acting like a cache buffer. Although, I should state that this is with some hesitation, as I'm not too familiar with the subject and what the benchmarks show. Still, you can't go wrong with a SSD. 120 GB seems like a little too much - your OS and games shouldn't be taking up that much space.
GPU: XFX Radeon 6950 1 GB $240. Solid performer and solid price. 1 GB of video memory isn't going to make a difference right now between that and 2 GB. It's true that in the future it will probably be utilized, but that kind of train of thought always leads you into more expensive upgrades, which defeats the point of this build.
Optical drive: pretty much any DVD-R/CD-R drive $20.
PSU: Antec Earthwatts 750W $80. Solid performer. Not much else to say.
Case: Coolermaster HAF 912 $60. Big enough for expansions, ATX boards, and more importantly, the GPU.
Total: @930. Keep in mind we started from scratch. Now if a budget is really stretched, the mobo could be replaced with the Asus p67-LE, which retails for around $109-120, the SSD could be dumped, and the GPU could be downgraded to a 6870. That easily cuts out $275 bringing our total down to $655 for a machine that will probably last well into the next few years.
The problem with doing theoretical builds like this is that it leads to constant stepping up of components but for no good reason. Upgrading is a painful process, but I think it should be done the cheapest way possible. First of all, very little can carry over from one build to the next. Otherwise, you wouldn't see so many people selling their CPUs, MOBOs, RAM, and GPUs in the classifieds here.
Secondly, and this is something that's come up again and again on this forum, there's no reason to upgrade if you can still play the games you want or perform the tasks you need to. Spending $800 on upgrades just to see even a doubling or tripling of framerates is absurd. I run an OCed e5200 and a stock 5770 and I get respectable frame rates. The only reason i'm upgrading is because my system is so old, it can't play new games right now. Upgrading to a mid-range system will last you just as long as a high end system.
Think of it this way: adopters of the e7xxx-8xxx, q6xxx-q9xxx, and Phenom II x2/3/4 made it through the last few years, and only the recent Sandy Bridge architecture has warranted serious consideration of an upgrade; but again, those chipsets won't bottleneck a new GPU, so the main components will still carry its weight. Spending so much in upgrades is like spending $500 for a single component throwing the rest out of balance.
Then again... i'm very cheap.