Ok, here's what I got:
DVDRW - 19
http://www.newegg.com/Product/Produc...82E16827106289
GTS450 - 110 (30 MIR as a bonus)
http://www.newegg.com/Product/Produc...82E16814500183
PSU - Antec EW 430
http://www.newegg.com/Product/Produc...82E16817371034
Memory - WinTec AmpX 4GB DDR3 - 35
http://www.newegg.com/Product/Produc...82E16820161279
OS - Windows 7 Home Premium x64
http://www.newegg.com/Product/Produc...82E16832116986
MB/CPU Combo - i2500k + Z68 Biostar - 305
http://www.newegg.com/Product/ComboD...t=Combo.658273
Grand Total = 616.01 (585 after MIR) (Add $15 for the caddy I suggested earlier)
Some changes from your suggestions:
Replaced your OS with Windows 7... IMO, there is no reason to stick with XP unless you have to. 7 is a much better OS.
Upped RAM to 4GB, running 2gb is a simply a bad idea with new hardware. RAM is cheap. Why not run at least 4GB, as RAM helps to make your system better for pretty much everything.
Dropped PSU down to a less expensive, capable, reliable unit.
Added SATA DVDRW... you really should let the old IDE stuff go, IMO. It is slower, likely louder, and just not necessary.
Dropped VC down as gaming is not your primary focus. This will be worlds better than your current GPU, and won't waste money on something that you aren't taxing too hard.
Improved CPU, better chipset on the MB. Supports SSD caching should you choose to do it in the future. That point alone will improve your overall computing experience. Also gives you the option to overclock should you choose to later on, while not being all that much more expensive than the lesser CPUs ($10 to $20 really).
You're probably insistent on keeping the IDE stuff around, and while that is understandable, you really should leave it outside the system. I replaced a functional IDE DVDRW with a SATA one at one point, and it really was a shock at how much better the technology has gotten. For the optical drive, it's a mere $19. Well worth it, IMO.
I could probably improve the hardware side of things by cutting out Windows 7, but, IMO, your overall computing experience would be greatly improved by getting a better OS. For about $600, this is what I'd do.