If you are using primarily for gaming, just get a 2500k. If you intend to keep this system for 3-4 years, I suppose the 2600k may be worth the extra $100. However, you are better off investing that $100 into a 2nd GPU.
ASRock Gen3 LGA 1155 Intel Z68 DDR3 2133 LGA 1156 HDMI SATA 6Gb/s USB 3.0 ATX Intel Motherboard - Z68 EXTREME7 GEN3
Massive overkill. What do you need Extreme7 version for?
$125 for the Extreme3 version. It has everything under the sun!
G.skill Ripjaws X Series 16gb (4 X 4gb)
2x 4GB is enough. RAM prices will only continue to fall over time. So you can pick up more ram when it's cheaper in 12-15 months if you really need more than 8GB by then.
OCZ ModXStream Pro 700W Modular High Performance Power Supply
I would personally go with a PSUs made by Seasonic, PC Power & Cooling, Corsair, Enermax, XFX or Antec. If you want a good modular PSU to drive 2 GPUs without breaking the bank:
$100 XFX
For the videocard:
See now take that $100 savings from the 2600k --> 2500k and add that $100 towards your $400 GPU budget and get 2 of these
XFX HD6950 2GB cards.
Alternatively, buy this HD6950 2GB for $250 right now, take the $150 left over from your $400 GPU budget + $100 savings from the 2600k ==> and buy a brand new $250 GPU in 24 months from now.
EDIT:
Wow, why not on the 2600K? It OC's better than anything doesn't it? This won't be for 100%. I will use it for everything including encoding very large media files.
In that case, why don't you wait until October 12th to see how AMD's FX8150 will perform. It should be very competitive in encoding.