Well, the party's over I guess, when I first built this machine it was a beast and it lasted me well for a long time, up until recently I would run any of the newest games at highest quality with no problem.  The latest patch of new games however finally killed my machine, Bioshock, Crysis etc. I can't even run them on my machine.

Here is my old build:

core of the system was:
Processor: AMD Athlong FX-51 2.2 Ghz
Mobo: Asus SK8N
RAM: CORSAIR TWINX1024-3200C2 512MB x 4
GFX: Radeon 9800 XT 256 mb

Overclocked

Now I'm not the most tech savvy person in the world, but I'm capable when I need to be.  I do my research and feel comfortable building, and overclocking my machine.  Still I haven't been keeping up on the latest technology that well, and I'm afraid that I can't salvage any of these, the graphics card seems to be my biggest problem now as it can't run the new games, but because it was before PCI-express I am sure I will have to replace my motherboard (which means my processor too) as well.  The RAM is probably outdated too, I wonder if I should just ditch it for some 1G sticks, since some MMO's that I play are really RAM heavy.

My PSU I should probably replace since if I am spending 500+ on a new system anyways it would be a shame to fry it.

My Case probably won't fit new motherboards etc.

My DVD player I wouldn't imagine I need to replace, I mean it plays DVD's still I don't see the need to upgrade here unless it would be incompatable with the new motherboard for some reason.

I also have a WD 160G| 7,000 rpm 16M SATA2  hard disk that I guess I could use, although I need to get at least one new hard drive as I need more space already.

What about Fans?  I have 4 fans I installed, they seem fine would there be any issue with me bringing these over to the new machine?

So it looks like I am going to have to replace pretty much everything, but at least I don't need a monitor this time.

For my new build I'm looking for some advice,

from reading this forum here is what I am thinking:

PSU: Corsair HX520w
RAM: maybe 2x1GB OCZ Platinum DDR2 PC6400 Dual Channel Kit (Cas 4) - $74.99 (cheaper than the two 512's I just bought <6 months ago)
Processor: Core2Duo E6750@2.66Ghz (hear that going quadcore isn't necessary for gaming, although it doesn't seem like a huge upgrade to me from my FX-51 maybe someone can explain what is so great about it, I'm mainly upgrading this so I can get a PCI Express mobo)
Motherboard: Gigabyte P35-DS3R $129.00
Case: No idea any suggestions would be great (wouldn't mind something not flashy)
GFX: 8800GT

I know everyone asks this but how does this look?  I want something that can run the latest at pretty high settings, and that can hopefully make me as proud as my previous build.  Would it be realistic to get all this for under $1,000 I decided to go back to school for a graduate degree so I will soon be a poor college student again (just with more debt now).

Looks like a pretty good setup to me.  As for the processor, we're still not too sure about how important having a quad core will be for gaming purposes over the next couple of years.  Crysis was supposed to take advantage of quad core systems, and it does, but it doesn't make a difference in frame rate.  of course, this could be because at this point in time the gpu is the bottleneck, event the 8800 GTXs/Ultras.  
 
Anyway, what you have look great, and if you milk the mileage out of your new machine as much as you did the last one, you'll be happy for several years.  
 
P.S.  Looks doable for under 1,000.

You are right that you can't really salvage much more than the HDD and DVD drive.
 
I like this case.  It has really good airflow.  There is one just like it with a window if that's your thing.
 
I saw an article that showed Crysis using 4 cores, so some multi threaded applications and games should be able to take advantage of multiple cores.  
 
What size monitor will you be using?  That will make the difference on what settings you will be able to run.  Crysis can slay top notch gaming machines at high settings.

@OP.  
Your list looks good. If you plan on OC'ing make sure you get a good CPU cooler. I would also recommend a Quad core if you plan on using some high end programs such as Maya, SolidWorks, Photoshop. For gaming a quad core is not necessary, because dual cores have better OC'ing ability which gives it an edge in games.  

Looks very good, but you can get the ram even cheaper than that. http://www.newegg.com/Product/Prod [...] 820227139. It runs very well on GB boards. I have it on a P35-DS3L. Here is a good gaming case that will not break the bank. http://www.newegg.com/Product/Prod [...] 811119137. Good air flow, and looks more impressive in person.
 
You could keep the 160gb as your "Windows" drive and get a 250gb or larger Seagate 7200.10 drive for data storage.

Thanks for all the tips oh and my monitor is a 26" CRT which is why I wanted something that can handle higher resolutions, but if it comes down to it I am fine with something like 1280x1024 (which is what I have had to use on this comp for a lot of newer games).
 
As for quadcore.. this is really where I was most uneasy, the one I had just didn't seem like such a revolution from my old FX-51 (may be wrong, is speed really not that important?  Or have processors just kinda hit a ceiling, when I got my FX-51 I thought it was super fast and a huge upgrade from my old early P4) and I kinda felt like why spend $1000 and end up regretting not spending an extra $50-100 for a better processor.  
 
I do use adobe suite, but I can run that on my current computer so I would think dualcore should be ok for what I am doing, how big of a price difference would we be talking about with a mobo too?  (I can look it up I guess not a big deal)
 
Also other than the fact that nothing seems to be immune to Vista problems, does anything I have here have specific problems running vista.  I can't find my XP machines and will probably have to upgrade that as well unfortunatley (not going to buy xp again for the same price as vista).

I know you want new. But, you could just buy a 1950xt agp card and overclock the ---- of what you have. It's still a very nice system. And the 9800 card will ebay for at least $100. So $100 gets you rocking with much less time. I also here faster AGP cards are comming soon.

Ok so I took Joewho's advice and got an 1950 AGP card, only problem was I didn't think my PSU would run it (its only got 20 amps on the 12v).  So I upgraded that as well and got a Corsair HX 520W that someone in the graphic card forum recommended.  Only problem is my new PSU does not have a cord for my CPU's fan, it is a little tiny 3 whole cord that plugs in next to the CPU on the motherboard.

I got to thinking and is my motherboard possibly too old to be used with new PSU's?  I can't find any information about what power connections come with PSU's on Newegg, if anyone can make sense of what I am saying here can you help me.  Is there a converter I can by to fix this problem, or a PSU out there that has the ampage to run a 1950 and still has the power adapter for my CPU fan?

It has two wires, black and blue (not sure if that matters), and a female connector with three small holes.

Oh and I just wanted to say I love this forum, I came here when I built my first computer five or so years ago and everyone is really helpful.  Unfortunatley its been so long since I have worked on my computer, or seriously looked at hardware that I am kinda clueless as to what I need, and what will work with my old system still so I really appreciate the help.

The power supply isn't supposed to power the CPU fan directly, any fan headers coming out of the PSU are for case fans. The motherboard should have a header for the CPU fan specifically. The black and blue is probably a header controlled by the PSU depending on load and temperature.

well I have the motherboard's header connected to the CPU fan, but there is also a place for the PSU's header.
 
Do I need that, since the new corsair PSU doesn't have it.  I only worry because i have overclocked my FX-51, and don't want it to overheat.

Check out the thermaltake vg7000 series, they look pretty cool for cases.

You've done your homework...some real nice components there.

I plan to wait to do the full upgrade, and am trying to get my old system to work with a new PSU (corsair HX 520w) and 1950 pro AGP graphics card.
 
The problem I am having is that my old PSU had a cord that plugged in next to the Motherboards header for the CPU (or CPU fan I'm guessing), and the new PSU doesn't have this.  Is this something that I need, I don't want my processor to overheat.