The future is moving towards integrating home entertainment and the PC and all that video stuff that you may think you don't need now might make you kick yourself later.
In my desktop, I have 4 200 gig SATA drives. But then again, I'm insane, so there's probably a good neutral ground. :)
512mb of ram is really too little though. Otherwise, the system looks fine and Newegg is a great dealer. I just got a sound card from them today in fact.
My current system is as follows:
Windows XP Professional Version 2002.
AMD Duron Processor, 797 MHz, 368 MB RAM, 12 GB
:^]