So, apparently I get money this year.

Is there any salvageable hardware in your current machine at all?

The main advantage to picking individual components rather than bundling is you get more control over your end product. I'd go with a quad core CPU and a better case for a starter PC personally (probably a cooler master CM 690 II case) but you have to go with the budget too. If you go with the AMD bundles you can save some more money there, though at the lower cost end there the Intel I3 processors and motherboards are pretty comperable in cost and speed.

You'll need a minimum of a 550 watt Power supply to drive a gaming video card. Check your current PC, it may have one. also make sure it has video card 6 pin PCI express power leads and an 8 pin core voltage lead for the motherboard. Optical drives are cheap, the amount of trouble you will save by going with a new SATA drive over trying to use an old, likely IDE one is worth the $20. Hard drives last 3-5 years on average before failure, if your drive is particularily old, its probably not worth trying to build a new computer around. Your existing video card, depending on age and slot type, etc, might work as a temporary unit until more funds came available to at least get you up and running.