I really like the setup u made for me it was very helpful and its a great computer.
I have a few questions tho, reguarding 64 bit is it better for me to get a 64bit OS since the processor will be 64 bit?
or should i stay with a 32bit OS?
64-bit Vista is better if compared to 64-bit XP in terms of driver support. However, just because your processor is 64-bit, it doesn't mean you have to use 64-bit OS. Depends on what drivers you need, you might encounter some hardware/software where it doesn't have any 64-bit driver. The advantage you get from using 64-bit OS is that the system can use 4GB or more of RAM, 32-bit OS can only use ~3.5GB.
I read a view bad reviews about the case that it has trouble fitting everything in, do you think that could be a problem I could face?
Not really, I have the same case, 3 hard drives, 1 dvd-drive and I used my brother's GTX260 and it fits fine just as long as your cable management is good (mine wasn't because my cabling wasn't done for the GTX260 but for 8800GT, GTX260 is bigger than 8800GT). You can get the Antec 1200 (~$150+) and then you wouldn't have any problems at all. Antec 900 would probably be hard, cable management wise as it doesn't have that space behind the motherboard to hide cables.
Should I get a phsicis engine as well?
What for? If I can recall right, that's for the video card right?
Also what about a cooling system? Do I need one? or even a fan?
Depends on the case you'll get. The CM690 comes with 3 fans, one in the back/bottom (exhaust/intake, I can't remember which), one on the top (exhaust I think) and one at front (intake). Sometimes, having more fans doesn't mean its better. You can have up to 6 fans inside.
The mobo comes with an 8.1 audio chipset so does that mean i wouldn't even need to get a sound card? just some computer speakers?
This is personal preference, usually only audiophiles need soundcard for better audio so I suggest using the on-board first and see if you like it, if not then buy a sound card.
Also about overclocking. Ive never done it i'm not even sure how to but that would be something im intrested in knowing how to do and mybe doing. I'll do my homework tonight on over clocking
But what kind of changes would we have to make if thats something im intrested in. I read good reviews about the cpu and mobo both overclocking very well.
You have to change the heatsink on your processor to a better one.
PS: What about ddr3 ram? is there a big difference from ddr2?
Right now, I believe there isn't a huge difference and their timings are a little slow and they're quite expensive. To be able to get DDR3 RAM, we'll have to change the motherboard that supports DDR3 and they're quite expensive so I suggest not investing on this for now.
PSS: What if I substitute that video card for one of these instead. PNY or the xfx
Hmm, I don't really know about this, maybe wait for somebody else to comment?
But, if it was me, I'd probably go with GTX 260 however 9800 GX2's performance is better (based on reviews) but I've heard that it doesn't scale that good on some games as it is technically in SLI (2x8800GTS), the GX2 also creates more heat and uses more power and it is also nearing its EOL (end-of-life).
Hope that helps.