Slightly over your budget at $653.81 before mail in rebates - $604.81 after mail in rebates.
For now you will need to use your present optical drive and HDD, the OS issue you will need to talk to MS about using your present W7, here is your list - let us know what you think and also what you and your buddy had in mind;
$54.99 Free shipping – Case http://www.newegg.co...N82E16811129066
Removable/washable dust filters - a must for top cooling.
$121.99 + $7.87 shipping – MB http://www.newegg.co...N82E16813157271
PCI-E 3.0 and Ivy Bridge ready - future upgrade options.
$219.99 Free shipping – CPU http://www.newegg.co...N82E16819115072
Best bang for buck CPU for a while - cores are unlocked.
$38.99 Free shipping – 8GB Ram http://www.newegg.co...N82E16820231308
What can I say 8GB of CL-7 Ram for less than $40
$139.99 Free shipping – GPU http://www.newegg.co...N82E16814130625
I would have liked a bit more cash but this will do for gaming.
$69.99 Free shipping – PSU http://www.newegg.co...N82E16817139028
More than enough clean and stable power and 80% efficiency.