New $300 Build, Advice?

well my friend is asking me to build him a $300 rig. He is giving me a 5 year old pc and just wants me to replace what needs to be replaced. He used some barebones kit, so Im thinking all im gonna keep is the case and dvd burner. So for $300 what should i get? He has a OS (XP), and all periferals. The purpose of this rig is it will be used to TEST SOFTWARE. So it must run photoshop, premier, etc smoothly. I was thinking e5200+G31+4GB+cheapest Dx10 video card i can find. I really would like this over a amd rig as e5200>>>>>>athalon X2, unless someone can fit a very fast amd cpu that will hands down beat the e5200, i wont consider it. The better integrated video in amd mobos is not really too much of a selling point. So should i bother forking out some $ for a 8400/3450 for this kind of rig?
Put together what you suggest!
PS he said the HDD is like ~100GB and wants a new one. I assume its IDE, so it cant be reused anyway since the burner is also ide and most mobos have 1 ide port only and buying an adapter probably isnt worth it for it. Ill keep the spare old parts as payment. With 640GB hdds starting at $60 i see no reason to buy less, and with a TB at $88 i may even be able to squeeze that in if there is left over money.