You may want to swap out the PSU with this:
PC Power & Cooling S61EPS 610W It's the same price (after rebates) and PC Power and Cooling is one of the best brands out there. However, it does say that the "Special Savings" ends tomorrow.
Also, I think that with $1000, you could upgrade to at least a Core2 Quad or a Phenom X4 and a better graphics card, but don't take my word for it, I'm still new at this.