What I'd suggest would be:
Sapphire Radeon HD 3850 256MB - £73.70
Gigabyte AM2 AMD 740G Motherboard - £42.10
AMD Athlon (2-Core) 4850 2.5GHz 1MB Cache - £54.73
Crucial 1GB Ballixtix Tracer DDR2 800MHZ (PC2-6400) - £22.30
That will do extremely well for gaming, and will cost you £192.83 (although probably be an extra £5 post and packing)
Somthing I'd like to say is if you can save up just a little more for a
AMD Phenom (3-Core) 8450 2.1GHz 3.5MB Cache for £89.51 (performance in games is slightly better than the Core 2 Extreme)
Also keep in mind 2GB memory will also be quite useful, if that's combined with a second ATI Crossfire capable graphics card (doesn't matter what one with that motherboard
) or just an upgrade to the new HD 4K-Series then you'll have a fairly powerful system for some time to come.
Another thing to keep in mind is for the cost of a game, you could also have this
AMD Phenom (4-Core) 9550 2.2GHZ 4MB Cache for £120.14; which frankly ridiculously powerful.
Don't expect the AMD processors to give you amazing Vista Desktop performance or be great for work applications (like Video Encoding and alike) as next to their Intel rivals they're just not quite as good. Gaming wise though, they're just freaking amazing. It's probably more due to the design of AMD as it requires software enhancement to take advantage as well as a more limited memory bandwidth; but it's great for things that pre-load and offload more directly to video hardware (like games using DirectX)
Still the first setup I recommended will just just about every current game totally maxed out. Even if you might want to turn off AA on resolutions higher than 1280x720. Much better value for money than the competitors imo.