Advice Needed: You're Smart; I'm not. Rig-Building Extravaganza!

Hey OCers,

My friend, TheInformationator, referred me here. We game together, and he said overclock.net has some of the best tech-savvy minds on the net. My PC died recently and it's so old it's not worth trying to upgrade/repair. I'm looking to build a solid gaming rig on a budget. Your expert advice would be sincerely appreciated.

Budget including shipping (Canadian dollars):
Max: $1000
Preferred: ~$500

Don't Need:
-Mouse + Keyboard
-Monitor
-Disk Drives
-Sound Card (Will use whatever onboard my mobo has)

Maybe:
-PSU (I have an Antec Neo HE550 -- 550W)

Need:
-Videocard
-Motherboard (No real preference)
-CPU (Looking for best price-performance ratio, not necessarily a brand)
-Heatsink (Doesn't have to be amazing, I'm not going to OC, just cheap and effective)
-RAM
-Hard Drive (I've been using a 60GB drive for 10 years, so even a 500gig would wow me)
-Case (Something cheap with good airflow. I'm considering The Antec 200 http://tinyurl.com/yaqkf7j)

I want to save money without making huge sacrifices in performance/quality. As close as I can get to $500 without suffering a huge loss in quality, the better.

Thanks in advance,
-Rhykker